IndusInd Bank share price recovered after dropping more than 6 percent in intra-day trade on Thursday after the lender clarified that it was not a subsidiary of Hinduja Bank, whose licence was cancelled by Cayman Island Monetary Authority last year.
The stock price took the beating after an old report resurfaced about the Cayman Island Monetary Authority cancelling Hinduja Bank’s licence. The promoters of IndusInd Bank, Hindujas also control the Geneva-based Hinduja Bank.
In May 2020, the Cayman Islands Monetary Authority had cancelled the banking licence of Hinduja Bank over non-compliance to money laundering rules and governance issues.
According to the order, the Cayman Islands Monetary Authority found that Gilbert Pfaeffli, general director of Hinduja Bank, was “not a fit and proper person to hold the director position of a licensee, and the bank also violated the mandatory provisions to have at least two directors at all times.
However, IndusInd Bank denied the reports of it being a subsidiary of Hinduja Bank calling it “malicious, untrue, and baseless.”
“IndusInd Bank desires to clarify that it is not a subsidiary of any entity. The Bank wishes to further clarify that it is promoted by IndusInd International Holdings Ltd. (IIHL) and its subsidiaries. IIHL is a Mauritius-based company set up by overseas Indians and no ‘one’ shareholder is in control of IIHL,” IndusInd Bank said in a regulatory filing.
The stock price of IndusInd Bank recovered from losses after the bank's clarification.
On Thursday, the shares of IndusInd Bank ended 2.15 percent lower at Rs 1,005.85 apiece on the BSE.
(Edited by: By Ajay Vaishnav)
First Published: IST