IndusInd Bank has taken total provisions of Rs 350 crore on IL&FS: CEO Romesh Sobti

IndusInd Bank shares have witnessed selling pressure in the last few days as investors remained concerned about the lender’s exposure to debt-laden IL&FS. Romesh Sobti, Managing Director and Chief Executive Officer of IndusInd Bank, spoke to CNBC-TV18 about the same.

“We didn’t disclose the exposure because end of the day just disclosing the exposure is meaningless. I think that the only reason that we held that back is the fact that there is a resolution plan which will detail out and bring out what the impact is going to be on the lenders. The lenders to the holding company and the lenders to the SPVs. What we had explained in the call is that we have exposure to the holding company as well. We had explained how that exposure was taken and on what basis it was taken which was linked to a definitive inflow of funds, which came from an assurance from listing shareholders with the board meeting having passed that and within the rights issue. So now it looks like that has been deferred and therefore, I think we need to wait for the resolution plan to bring out the extent of whatever impact that it is going to have on the bank,” said Sobti.

“Giving out the exposure may not help but giving out an estimation of what it will mean in terms of the total profit impact that is more important. We are debating that, we are also talking to IL&FS new board and I think in the next few days, we may have more clarification on that and if there is a need then we will come out with some of the other numbers which gives comfort to the market,” he added.

“The resolution plan may come out with some degree of haircut which may mean that you may have to take little more provisioning but at least we made a beginning. It is difficult for me to say how much more provisioning that we may need to make,” said Sobti.

Sobti also denied rumours of his exit from IndusInd Bank, clarifying that he is not looking at early retirement.