New Delhi [India], March 18 (ANI): Concerns over internal control discrepancies in derivative accounts and retail loan stress of IndusInd bank has prompted rating agency Moody's to place the bank's baseline credit assessment under review for downgrade. The bank has discovered a USD 175 million accounting discrepancy related to currency derivatives. Shares have dropped over 28 per cent since the Reserve Bank of India decided to extend the term of CEO Sumant Kathpalia's by a year. Also Read | Novak Djokovic, Carlos Alcaraz Land in Same Half of Miami Open 2025 Main Draw. Investors Service of the rating agency has placed IndusInd Bank's Ba1 long-term foreign and local currency deposit and issuer ratings with a stable outlook while placing its ba1 Baseline Credit Assessment (BCA) under review for a potential downgrade following the bank's disclosure of discrepancies in its derivatives portfolio, which could result in a Rs 2,000 crore loss in the March 2025 quarter. Moody's says that the review for downgrade reflects concerns over these accounting discrepancies along with stress in the retail unsecured loan portfolio which could affect the bank's profitability, capital, and funding. Also Read | Chaitra Navratri 2025 Dates: When Will Ashtami and Navami Be Celebrated? Know Rituals, Significance of Worshipping 9 Forms of Goddess Durga. Moody's also highlighted uncertainty regarding leadership changes at IndusInd Bank. "The stabilization of the BCA will also be subject to the bank resolving the concerns surrounding senior leadership positions, as well as its financial controls and risk management," said Moody's. However, despite this, Moody's has affirmed the bank's Ba1 ratings with a stable outlook, citing its strong capital position, robust core profitability, and stable funding, which are expected to help mitigate immediate credit risks. On March 10, 2025, IndusInd Bank disclosed accounting discrepancies in derivative transactions executed over the last few years for hedging foreign currency borrowings. The bank has engaged PwC as an external advisor to conduct a review to identify causes and assess the mark-to-market losses. The review is likely to be in three months. The Reserve Bank of India (RBI) has approved the reappointment of IndusInd's Managing Director and CEO for only one year against a recommendation of three years by the banks board. Additionally, the recent resignation of the CFO of the banks has raised further governance concerns. IndusInd's asset quality is under among retail borrowers. The bank's gross non-performing loans (NPL) ratio increased to 2.3 per cent by December 2024, up from 1.9 per cent in March 2024. Microfinance and credit card segments seeing the highest stress. Moody's anticipates further NPL deterioration but expects proactive provisioning to mitigate profitability and capital impacts. However, despite all the challenges, the rating agency remains confident in bank's funding and liquidity stability, citing its strong domestic franchise and access to international funding sources as key factors supporting financial resilience. A downgrade of bank BCA may occur if external reviews reveal adverse findings on its derivative accounting or if asset quality deteriorates significantly. (ANI) (This is an unedited and auto-generated story from Syndicated News feed, LatestLY Staff may not have modified or edited the content body)