SEBI Steps Into IndusInd Bank’s Derivatives Discrepancy Saga — Here’s What You Need to Know

Shares of IndusInd Bank are being closely watched by investors in today’s trading session. An investigation by markets regulator Securities and Exchange Board of India (SEBI) revealed that senior executives were aware of the discrepancies in its derivatives portfolio as early as December 2022, however, they chose to hide this information from the public for over 15 months.

As per SEBI, several senior officials exited their stock positions before disclosure was brought to light in March, triggering a 27% decline in bank’s shares.

SEBI’s probe revealed that CEO Sumant Kathpalia and top executives were aware of the discrepancies well before they became public.

However, the bank disclosed these developments as Unpublished Price Sensitive Information (UPSI) on March 4, 2025, just days before the public disclosure.

Sebi concluded that this delay violated regulatory norms and enabled insiders to offload shares, protecting themselves from heavy losses. The regulator has now launched an insider trading investigation into the matter.

SEBI has banned five senior executives from accessing the securities market and frozen the profits earned from the alleged insider trades.

Notably, five IndusInd Bank executives sold shares between December 4, 2023 to March 10, 2025 after discovering the irregularities but before informing the public, SEBI’s 32-page order stated.

CEO Kathpalia offloaded 1.25 lakh shares, avoiding a ₹5.2 crore loss, while fellow executive Khurana sold over 3.4 lakh shares, steering clear of a potential ₹14.3 crore hit.

As of 11:30 am, IndusInd Bank shares are trading at ₹815.70, up 1.31%.