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New Delhi, Mar 23 () Private sector lender IndusInd Bank on Monday said its managing director and chief executive Romesh Sobti has retired, having completed his tenure. Sobti, shall demit the Office of Managing Director &amp; CEO of the Bank, today, March 23, 2020, in line with the tenure approved by the RBI, the bank said in a regulatory filing. Sobti's retirement comes as he has turned 70. The banking regulator has stipulated 70 as the retirement age for managing directors at banks. The board of directors has placed on record a deep appreciation for the wide ranging contributions made by Sobti since taking over the position of managing director and CEO on February 1, 2008, it added. The bank in late February had announced elevation of its consumer banking head Sumant Kathpalia as the new managing director and chief executive with effect from March 2020. Notably, Kathpalia takes charge of the bank at a time when there is a deep mistrust among customers in private sector lenders and rumour mongering keeps simmering in markets, which has caused severe beating to various lenders post YES Bank debacle. However, many private sector lenders have time and again issued statements in a bid to quell market sentiments and restore faith among customers. Kathpalia is a career banker with over 33 years of experience in large multinational banks such as Citibank, Bank of America, ABN AMRO and IndusInd Bank. He has successfully held several leadership roles over his career with a focus on driving business growth and innovation. KPMMKJ

IndusInd Bank MD & CEO Romesh Sobti retires

<keyword id="46717" type="COMPANY" weightage="20" keywordseo="IndusInd-Bank">IndusInd Bank</keyword> on Thursday announced elevation of its consumer banking head <keyword id="617587" type="PERSON" weightage="20" keywordseo="Sumant-Kathpalia">Sumant Kathpalia</keyword> as the new managing director and chief executive with effect from March 2020. As previously advised to the exchanges, the bank's Nomination and Remuneration Committee and the board had considered and submitted the name of a potential candidate for the role of MD and CEO to the Reserve <keyword id="6355303" type="DOMAIN" weightage="20" keywordseo="bank-of-india">Bank of India</keyword> (RBI), seeking approval for the appointment, it said in a release. "The Bank has received a communication from the RBI today, approving the appointment of Sumant Kathpalia, who currently heads the Bank's Consumer Banking business, as the MD &amp; CEO for 3 years, with effect from March 24, 2020, post the retirement of <keyword id="85088" type="PERSON" weightage="20" keywordseo="Romesh-Sobti">Romesh Sobti</keyword>, the current MD &amp; CEO," it said. Kathpalia is a career banker with over 33 years of experience in large multinational banks such as Citibank, Bank of America, ABN AMRO and IndusInd Bank. He has successfully held several leadership roles over his career with a focus on driving business growth and innovation. He has diversified experience across various functions including business strategy, sales and distribution, operations, systems, risk and credit management and financial management. Kathpalia is a qualified Chartered Accountant and a commerce graduate from Hindu College, Delhi University. The private sector bank promoted by the Hinduja group commenced operations in 1994. As on December 31, 2019, <keyword id="201477" type="COMPANY" weightage="20" keywordseo="Induslnd-Bank">Induslnd Bank</keyword> had 1,851 branches/ banking outlets and 2,721 ATMs spread across 746 geographical locations of the country. The bank also has representative offices in London, Dubai and Abu Dhabi.

Sumant Katpalia will succeed Ramesh Sobti as IndusInd CEO

New Delhi, Mar 24 () Shares of IndusInd Bank on Tuesday dropped 30 per cent in morning trade after Romesh Sobti retired as Managing Director and CEO of the company. The scrip cracked 29.99 per cent to Rs 235.60 -- its 52-week low -- on the BSE even after a positive opening. On the NSE, it dropped 29.98 per cent to Rs 235.55 -- its one year low. However, later the scrip recovered most of the sharp early losses and was trading 4.62 per cent lower at Rs 321 on the BSE. In a filing to BSE on Monday, the company announced that Romesh Sobti shall demit the office of Managing Director and CEO of the bank, in line with the tenure approved by the Reserve Bank of India (RBI). The board of directors has placed on record their deep appreciation for the wide ranging contributions made by Sobti since taking over the position of Managing Director and CEO on February 1, 2008, it added. In another filing, the company announced that the board of directors has noted that Sumant Kathpalia would take charge as additional director, designated as Managing Director and CEO of the bank for a period of three years, with effect from March 24, 2020. SUM ANSANS

IndusInd Bank shares plunge 30 pc after retirement of Romesh Sobti as MD, CEO

<ul><li>IndusInd Bank’s provision for losses from IL&amp;FS may be too little too late, according to an analyst. </li><li>The provision for bad loans in the latest quarter should have come at least eight months ago, says Hemindra Hazari. </li></ul> To start with, Mumbai-based IndusInd’s profits fell by 62% in the fourth quarter compared to ₹9.5 billion to ₹3.6 billion. Yet, investors and analysts are happy. Their rationale -- bad loan burden due to its defaulter IL&amp;FS -- was not as bad as expected. Between January and March 2019, the bank made a provision of ₹12.7 billion against its loan to the troubled infrastructure lender, which had failed to pay back what it owes to banks, precipitating a liquidity crisis. A provision is where a bank sets aside some of its money to cover a loan that it believes is unrecoverable. For this, banks have to typically dip into their coffers, a step that can hurt its profits. Half truths But there are some who believe that the amount that IndusInd provisioned for the bad loan to IL&amp;FS, might not cover the extent of the exposure it has to IL&amp;FS. And, that there is an element of truth that may be missing from their statement. For one, it became obvious in September 2018 that IL&amp;FS had turned insolvent, but the full impact of it was not conveyed to analysts in a transparent manner. Added to that, the loan that IndusInd gave IL&amp;Fs is also unsecured, which means there is no collateral that the borrower has offered, which could have helped recover it. IndusInd chose to soften the blow to its investors by making only 13.8% (of the loan) provisioning in the second quarter ending September. It also assured the analysts that it may eventually go up by a further 20-25%. But this quarter ending March 2019, irrespective of the ‘maximum’ guidance it gave, the provision has risen to 70%. “They should have told us (analysts) from day one about the provision, and not have guided lower numbers to us,” says Hemindra Hazari, an independent capital markets. He wrote a report on the bank titled ‘<a href="http://hemindrahazari.com/2019/05/27/sell-side-analysts-blind-faith-in-indusind-bank-need-not-blind-investors/">Sell-Side Analysts’</a> Blind Faith in IndusInd Bank Need Not Blind Investors’. Staggering bad news This higher provision, as per an analyst report by Hazari, should have been made at least eight months back, when it had become obvious that IL&amp;FS had turned a toxic loan for every bank involved. “As per RBI norms, an unsecured non-performing loan requires 20-25% provisioning in the first year and requires 100% provisioning by the 366th day of remaining an NPA (non-performing asset),” said Hazari. The bank has not responded to Business Insider’s queries on the issue. In the second quarter analyst call, the managing director of the bank Ramesh Sobti had assured them saying, “So the best case scenario of course is that we don’t even provide this and we write it back and that scenario is equally possible. The scenario is possible that you make have to make another maybe 20 to 25% of this provisioning higher than this, is possible, so both scenarios are possible is the judgment call at this point of time that this is prudential in terms of our exposure.” Credibility of banks Changing stance regularly when a norm is in place usually affects the credibility of the management. Added to that, the bank has had several run-ins with regulators for incorrectly classifying its income. The banking regulator had imposed a <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/rbi-imposes-rs-3-crore-penalty-on-indusind-bank/articleshow/62055391.cms">Rs 3 crore fine</a> on IndusInd Bank in 2017 for violating its regulations on non-performing loans and extension of non-fund based limits. And here, the bank isn’t alone. Earlier, Hazari had also called out <a href="https://www.bloomberg.com/opinion/articles/2019-05-15/india-s-yes-bank-getting-a-director-from-rbi-signals-trouble?utm_medium=social&amp;cmpid%3D=socialflow-twitter-view&amp;utm_content=view&amp;utm_source=twitter&amp;utm_campaign=socialflow-organic">Yes Bank </a>and <a href="http://hemindrahazari.com/2017/12/13/wall-of-silence-sell-side-media-response-to-hdfc-banks-divergence/">HDFC Bank</a> both for inflating current profits using a tool called deferred tax asset--which will cause negative impact when it reverses in the following year. IndusInd Bank too had followed the same practice in its fourth quarter results. It is no secret that Indian banks are in trouble thanks to high profile defaults by Kingfisher Airlines head Vijay Mallya and diamantaire Nirav Modi, who have now fled the country. The grounding of Jet Airways and IL&amp;FS crisis is not helping no one. Yet, banks have chosen to provide a ‘feel good’ factor to investors, instead of giving forthright bad news. The <a href="https://www.thehindubusinessline.com/opinion/the-way-ahead-for-dealing-with-npas/article27198338.ece">total NPAs </a>for all scheduled commercial banks for the year 2017-18 stands at Rs 10.4 trillion. And, there is no way of underplaying this amount or an amount higher than this, or delay announcing bad loan news hoping for a better tomorrow. SEE ALSO: <a href="https://www.businessinsider.in/indias-lehman-moment-seems-closer-as-top-mutual-funds-defer-dues/articleshow/68831689.cms">India's 'Lehman moment' seems closer than ever as top mutual funds defer dues to investors</a>

An Indian bank is still making the same mistake of hiding the worst and hoping for the best

When <keyword id="6379603" type="PERSON" weightage="80" keywordseo="Arundhati-Bhattacharya">Arundhati Bhattacharya</keyword> was the deputy general manager at <keyword id="6354731" type="CITY" weightage="80" keywordseo="State-Bank-Of-India">State Bank of India</keyword> (SBI) in 2001, she used to wonder why the bank is spending so much to maintain foreign operations' back office overseas. She couldn't do much at that time. Now as the chairman, she worked methodically and systematically to fix problems and used technology and recovery model to transform the bank. 
 

	According to her, red tape and a rigid bureaucratic structure made even the simplest of tasks difficult. Today, she is the bank's chairman and has not forgotten her 14-year-old idea. "I did not find traction then, so I am bringing it now," Bhattacharya told the Economic Times. 
	 

	Locating bank back offices in low-cost locations like India would seem a no-brainer. The fact that SBI is doing it now may seem ordinary but it is important in the context of the bank's history, its decision making process and its structure. 
	 

	India's biggest, oldest and most venerable bank faces multiple challenges at a time when the weight of bad loans alone, not to mention competition and costs, threatens to derail its plans. 
	 

	Bhattacharya would know more than anyone else that SBI may well get bypassed by the technology revolution if it does not take serious steps. She is not sitting idle, but she is not tearing up the system and creating a revolution either. She is working to identify problems and fix them. Technology and recovery will be the pillars on which SBI rests. When she decided to transform the bank from a staid state-run lender into a customer-friendly one, she went hunting for a technology hand familiar with the ways of the West, and hired former <keyword id="6386585" type="CITY" weightage="80" keywordseo="Barclays">Barclays</keyword> executive SK Bhasin as chief technology officer. 
	 

	"I have been looking across the globe for people who have done these things well to try and replicate some of their experience," says Bhattacharya. We have done all of these through IT (information technology). Without IT none of these things could be done well." State-run bankers, intensely focused on lending and raising deposits, rarely factored in technology in their lives. Bhattacharya's efforts in targeting future businesses is reflected in its recent business arrangements with <keyword id="18635" type="CITY" weightage="80" keywordseo="Amazon">Amazon</keyword>, Snapdeal and many more digital-age companies, pushing the Essars and Chettiyars to the back seat. 
	 

	New businesses are future profits. But what about the bad loans of the past, which together with restructured loans are at 10% of total loans, making the industry technically insolvent. SBI is no exception to bad loans. Its gross bad loans and restructured loans are at Rs 83,434 crore, or 8.4% of total loans, equivalent to the government's spend on social issues like healthcare and education this year. 
	 

	"There is no point in getting impatient," says Bhattacharya. "It has to be done diligently. When the finance minister wanted to know the one thing that was my priority, I said we wanted a bankruptcy law." The Indian judiciary is notorious for prolonging decisions on disputes, and the promoters of companies, especially wealthy ones such as United Spirits' <keyword id="14678" type="PERSON" weightage="80" keywordseo="Vijay-Mallya">Vijay Mallya</keyword> whose <keyword id="6373962" type="CITY" weightage="80" keywordseo="Kingfisher-Airlines">Kingfisher Airlines</keyword> owes more than Rs 7,000 crore, have exploited the loopholes. But because the <keyword id="6354477" type="PERSON" weightage="80" keywordseo="Narendra-Modi">Narendra Modi</keyword> government unlike previous ones does not provide defaulters with protective shields, bankers such as Bhattacharya are emboldened to take action. "We have a lot of angst against these promoters, who we believe are taking the system for a ride," says Bhattacharya. "If the promoter has taken money he has to give it back. There are no two ways about it. If they don't, their lives are going to be miserable. I have deep pockets to do it. There is no point in messing around." All this is not lost on foreign investors. SBI is the only top PSU lender where foreign funds are raising stake even as they have cut them in <keyword id="62034" type="CITY" weightage="80" keywordseo="Punjab-National-Bank">Punjab National Bank</keyword> and Bank of India. "I would say SBI is a private sector bank because the new CEO is phenomenal," says <keyword id="105152" type="PERSON" weightage="60" keywordseo="Avinash-Gupta">Avinash Gupta</keyword>, managing director and head of institutional equities at <keyword id="122772" type="CITY" weightage="80" keywordseo="Bank-of-America-Merrill-Lynch">Bank of America Merrill Lynch</keyword>. Gupta deals with a lot of foreign investors, many of whom are impressed by Bhattacharya's firmly-in-control attitude and her desire to change things. When Bhattacharya took charge in 2013, profits were sliding, bad loans were climbing, the economic climate had deteriorated and the private sector was poaching its clients . There was no point in waiting for the tide to turn. "I couldn't expect the external environment to suddenly turn around and give me good results," says Bhattacharya. What did she do? "Like any good housewife who will husband her resources when the chips are down to ensure every rupee helps make her go further," SBI turned prudent, she said. "When I talk about cutting expenses, I mean unwanted expenses. Not what is required to build business," she says. "All expenditure has to be controlled to yield the best results. A lot of us were travelling <keyword id="34412" type="ORGANIZATION" weightage="80" keywordseo="economy">economy</keyword> (class) for quite a while." 
	 

	Lawyers and landlords are at the receiving end of Bhattacharya's measures to contain waste. The days of branches negotiating rent for branch offices are over. It is no longer done at the 11th hour, which often gives property owners the upper hand. Alerts come up 18 months before the lease expires, and the head office monitors and ensures it is done a year in advance. 
	 

	It is no secret that the judiciary and the system are as responsible for banks' ills as the banks themselves. While disputes run for months, bankers remain observers. But this is not the case with SBI anymore. Its advocates have been made accountable. "There are some advocates who keep taking adjournments, and there are others who move fast," says Bhattacharya. 
	 

	"I know every advocate's performance." While a lot of these issues are administrative in nature, what is the scene when it comes to its core business — lending? "She has a very clear-headed approach," said <keyword id="85088" type="PERSON" weightage="80" keywordseo="Romesh-Sobti">Romesh Sobti</keyword>, MD &amp; CEO of <keyword id="46717" type="CITY" weightage="80" keywordseo="IndusInd-Bank">IndusInd Bank</keyword>. "It's a well-defined approach to many issues the banking industry is facing. She is forthright in her ability to articulate issues not only facing SBI but also the banking industry," said Sobti. There is a paradigm shift. Tractor loans, treated as crop loans, are now automobile loans. Instead of waiting for the harvest to repay, the borrower has to pay on a monthly basis, like with equated monthly instalments in a car loan. 
	 

	"When a farmer gets money from a crop, it first goes to others — the teacher, grocer... banks are last on the list," says Bhattacharya. "Make them EMI-based. Can I give them loans which will yield a regular stream of income? We were lacking the customer connect." 
	 

	Many current and former SBI customers would agree. The question now is not just how quickly she can change perceptions about the bank but also how soon she can make the bank's cash machine churn out profits. With non-performing loans assuming alarming proportions, it will take all of Bhattacharya's combativeness to stem the rot.

	 
	(Image: Reuters)

Know how SBI chief Arundhati Bhattacharya changed India's largest bank for the better

New Delhi, Mar 23 () Private sector lender IndusInd Bank on Monday saidSumant Kathpalia, who has been designated as managing director and chief executive, will take over the reins from veteran Romesh Sobti, who has retired after completing his mandated tenure. "The board of directors has today noted that Romesh Sobti's tenure as managing director and CEO of the bank would conclude as at the close of today, and that Sumant Kathpalia would take charge from tomorrow as additional director, designated as managing director and CEO of the bank for a period of three years, with effect from March 24, 2020," Indusind Bank said in a regulatory filing. Kathpalia's appointment as MD &amp; CEO will be placed for approval of the shareholders at the ensuing annual general meeting. "In accordance with SEBI instructions of June 14, 2018 to the stock exchanges, we affirm that Sumant Kathpalia is not debarred from holding office of the Managing Director &amp; CEO by virtue of any order of SEBI or of any other Authority," Indusind Bank said. Bank's long term MD and CEO Sobti retired on Monday as he turned 70. The RBI norm does not allow the position to be held by anyone beyond 70 years. Sobti was at the helm of affairs of the bank since taking over the position of MD and CEO on February 1, 2008. The bank in late February had announced elevation of its consumer banking head Kathpalia as the new managing director and chief executive with effect from March 2020. Notably, Kathpalia takes charge of the bank at a time when there is a deep mistrust among customers in private sector lenders and rumour morgering keeps simmering in markets, which has caused severe beating to various lenders post YES Bank debacle. However, many private sector lenders have time and again issued statements in a bid to quell market sentiments and restore faith among customers. Kathpalia is a career banker with over 33 years of experience in large multinational banks such as Citibank, Bank of America, ABN AMRO and IndusInd Bank. He has successfully held several leadership roles over his career with a focus on driving business growth and innovation. He has diversified experience across various functions including business strategy, sales and distribution, operations, systems, risk and credit management and financial management. Stock of Indusind Bank closed at Rs 336.55 apiece on the BSE, down by over 23 per cent. KPM MKJ

Indusind Bank's long-term MD & CEO Sobti retires; Kathpalia to assume charge

New Delhi, Feb 27 () IndusInd Bank on Thursday said it has elevated bank's head for consumer banking Sumant Kathpalia as the new managing director and chief executive.As previously advised to the exchanges, the bank's nomination and remuneration committee and the board had considered and submitted the name of a potential candidate for the role of MD and CEO, to the Reserve Bank of India (RBI), seeking an approval for the appointment, it said in a release."The bank has received a communication from the RBI today, approving the appointment of Sumant Kathpalia, who currently heads the Bank's Consumer Banking business, as the MD and CEO for 3 years, with effect from March 24, 2020, post the retirement of Romesh Sobti, the current MD and CEO," it said. KPM MKJ

IndusInd Bank appoints Sumant Kathpalia as new MD & CEO

New Delhi, Jan 24 () Private sector lender IndusInd Bank on Friday said it has launched its wealth management platform Pioneer Banking, which caters to high net-worth customers.
"Induslnd Bank announced the launch of 'PIONEER' Banking, its
wealth management platform," the private sector lender said in a BSE filing.
Based on research-based capabilities of the bank, the new service merges wealth management solutions with an array of personal and commercial banking products.
"Through this offering, we are bringing together superior privileges and lifestyle benefits, along with a wide array of curated banking products that suit the requirements of our valued customers....the PIONEER programme ...aims to restore the lost art of wealth management," Induslnd Bank Managing Director &amp; CEO Romesh Sobti said.
With no charges on non-maintenance of minimum balance, customers can enjoy the benefits of their Pioneer accounts without any worries, the bank informed.
"This new proposition will cater to the distinct and advanced wealth needs
of our HNI client segment," Induslnd Bank Head - Consumer Banking Sumant Kathpalia said. SID BAL

Induslnd Bank launches wealth management platform

<ul><li><keyword id="46717" type="CITY" weightage="20" keywordseo="IndusInd-Bank">IndusInd Bank</keyword> today posted 33% increase in its third quarter net profit to ₹1,309 crore. </li><li>Its net interest income too went up by 34% to ₹3,074 crore from ₹2,288 crore in the comparable quarter. </li><li>The fee income of this bank which has been banking heavily on its retail business, also went up by 22%. </li><li>Its deposits and advances too went up by a robust 22% on an annual comparison.</li></ul>Hindujas owned IndusInd Bank today posted 33% increase in its third quarter net profit to ₹1,309 crore from ₹985 crore in the same quarter last year. Its net interest income or revenues too went up by 34% to ₹3,074 crore from ₹2,288 crore in the comparable quarter. The fee income of this bank which has been banking heavily on its retail business, also went up by 22%. Its deposits and advances too went up by a robust 22% on an annual comparison. “During Q3 FY-20, the Bank witnessed a healthy growth in its topline as well as in operating profits. The Bank also reached a milestone as the Balance Sheet footage crossed ₹ 3 trillion and the advances crossed the ₹2 trillion-mark. PCR (provisioning coverage ratio) has been increased to 53% to strengthen the balance sheet,” said Romesh Sobti, managing director and CEO, IndusInd Bank said. However, the bank’s stock dropped by 2.9% to ₹1,493 as per BSE data at 3 pm. The bank which acquired Bharat Financial in 2017, is banking on its expanded footprint especially in the rural areas to drive growth going ahead. The acquisition turned effective on July last year, allowing the bank to derive full benefits of acquiring the shadow bank. A research note by Nomura says that the acquisition is a moat for the bank. “The asset side franchise has strengthened with BHAFIN, and IIB will undergo a full-fledged extension of the pilots that management believes will enable it to use Bharat Financial’s reach to create a rural touchpoint network that provides significant cross sell opportunity and also improve efficiency in a manpower-intensive MFI business,” said Nomura. The research note also believes that asset side strengths of the bank will be able to offset weaknesses in liabilities. “Bulkiness in liabilities and fees, apart from recent corporate asset quality issues, has been IIB's key weakness. While it is easier said than done, if the bank delivers well on granularizing its liabilities and successfully monetizing rural distribution via BHAFIN, it should drive a sustainable re-rating, in our view,” the note said.

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IndusInd Bank MD & CEO Romesh Sobti retires

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IndusInd Bank shares plunge 30 pc after retirement of Romesh Sobti as MD, CEO

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An Indian bank is still making the same mistake of hiding the worst and hoping for the best

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Know how SBI chief Arundhati Bhattacharya changed India's largest bank for the better

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Indusind Bank's long-term MD & CEO Sobti retires; Kathpalia to assume charge

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IndusInd Bank appoints Sumant Kathpalia as new MD & CEO

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