IndusInd Bank to raise up to $3.5 billion, allow Hindujas to nominate two board seats

India’s IndusInd Bank will raise up to $3.47 billion and allow promoters to nominate two board directors, the private sector lender said on Wednesday, as it seeks to restore confidence after a $230 million accounting lapse.

IndusInd is looking to secure 300 billion rupees in funding, comprising a 200 billion rupees debt issue on a private placement basis and a 100 billion rupees capital increase through issue or placement of securities.

The bank’s net worth took a $230 million hit in the fiscal year ended March 31 due to years of misaccounting of internal derivative trades, prompting the resignations of CEO Sumant Kathpalia and deputy Arun Khurana in April.

The UK-based Hinduja family own a 15.82% stake in the bank and are listed as its promoters, a regulatory classification in India for large shareholders who control key decision-making.

India’s IndusInd Bank to consider raising funds

The Hindujas can now nominate up to two directors on IndusInd’s board, the bank said, adding that the move was approved by India’s central bank.

Promoters previously did not have representation on the board.

IndusInd, currently run by an executive committee, has shortlisted three senior bankers - Rajiv Anand, Rahul Shukla, and Anup Saha - for the position of CEO, Reuters reported last month.

Saha resigned as non-bank lender Bajaj Finance’s managing director on Monday.

IndusInd will report its first-quarter results on July 28.