Mumbai, July 23 (IANS) The Hinduja family-promoted IndusInd Bank’s Board of Directors on Wednesday approved raising up to Rs 30,000 crore through a combination of debt and equity and allowed the promoters to nominate two board directors, as it seeks to restore confidence in its operations after the recent Rs 2,000 crore accounting lapse.

The lender will raise Rs 20,000 crore through debt securities in any permitted mode on a private placement basis, or its equivalent amount in permitted foreign currencies. It will also augment the capital base via the issue of securities, including American Depository Receipts, Global Depository Receipts, and Qualified Institutional Placement, amounting to Rs 10,000 crore.

The bank said after the approval of the RBI, it will make amendments in its Articles of Association to give its promoters, the Hinduja family, the right to appoint two non-executive, non-independent Directors on the bank’s board.

The UK-based Hinduja family, which can now nominate up to two directors on IndusInd’s board, did not previously have any representation on the board.

Earlier this year, IndusInd Bank made a disclosure of accounting lapses in its derivatives portfolio. The bank appointed external agencies to assess the financial impact, which was later revealed to be around Rs 2,000 crore, and to find the root cause of the accounting errors. The bank’s net worth took a big hit as the misaccounting of internal derivative trades was exposed.

Taking moral responsibility for the lapses, the bank’s CEO, Sumath Kathpalia, resigned in April, just a day after its former deputy CEO, Arun Khurana, left the bank.

The Mumbai-based private lender reported a net loss of Rs 2,328 crore for the January-March period as accounting issues and stress in the microfinance portfolio led to the balance sheet taking a hit.

IndusInd’s Net Interest Income (NII) or core income declined by 43.4 per cent from the same quarter last year to Rs 3,048 crore.

The asset quality of the bank deteriorated on a sequential basis, with Gross NPAs rising to 3.13 per cent of total loans from 2.25 per cent in the preceding October-December quarter, while net NPAs for the quarter stood at 0.95 per cent, up from 0.68 per cent in the previous quarter.

–IANS

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