The Reserve Bank of India said Saturday that the financial position of IndusInd Bank “remains satisfactory", reassuring depositors of the safety of their money after the lender last week reported discrepancies in its derivatives portfolio and warned of a one-time hit on its net worth. The bank is “well-capitalised”, while its financial health “remains stable" and is being closely monitored, the RBI said in a press release, and urged depositors not to be swayed by “speculative reports at this juncture”. Based on public disclosures, the bank has already engaged an external audit team to review its systems and assess the actual impact of any issues, the central bank said. It directed the lender's board and management to complete the remedial actions by the end of this month after making required disclosures to all stakeholders.
According to the bank’s auditor-reviewed financial results for the quarter ending December 31, 2024, IndusInd Bank has maintained a solid capital adequacy ratio of 16.46% and provision coverage ratio of 70.20%, compared with the RBI-mandated 9% and 70%, respectively. Its liquidity coverage ratio was 113% as on March 9, exceeding the regulatory requirement of 100%. The reassurance comes amid growing concerns about the bank’s lapses in derivatives accounting which it discovered in September-October but disclosed only on Monday.
IndusInd Bank has seen several setbacks in the past week. The RBI granted only a one-year extension to chief executive Sumant Kathpalia, instead of three years sought by the lender. Shortly after, the bank disclosed the accounting discrepancies in its derivatives portfolio, which is expected to result in a ₹1,600 crore impact on its balance sheet.
Its shares fell 27% Tuesday and hit a 52-week low of ₹605.40 the following day on the BSE. The shares closed last week’s trading 57% lower at ₹672.10 from their year high recorded in April last year. Meanwhile, the joint auditors of IndusInd Bank — MP Chitale & Co and MSKA & Associates — wrote to the bank’s board for a forensic audit of the derivatives portfolio, ET reported on Saturday. During an analyst call, CEO Kathpalia confirmed that an external agency had been appointed to review the portfolio, with the final report expected by the end of the fourth quarter.
According to the bank’s auditor-reviewed financial results for the quarter ending December 31, 2024, IndusInd Bank has maintained a solid capital adequacy ratio of 16.46% and provision coverage ratio of 70.20%, compared with the RBI-mandated 9% and 70%, respectively. Its liquidity coverage ratio was 113% as on March 9, exceeding the regulatory requirement of 100%. The reassurance comes amid growing concerns about the bank’s lapses in derivatives accounting which it discovered in September-October but disclosed only on Monday.
IndusInd Bank has seen several setbacks in the past week. The RBI granted only a one-year extension to chief executive Sumant Kathpalia, instead of three years sought by the lender. Shortly after, the bank disclosed the accounting discrepancies in its derivatives portfolio, which is expected to result in a ₹1,600 crore impact on its balance sheet.
Its shares fell 27% Tuesday and hit a 52-week low of ₹605.40 the following day on the BSE. The shares closed last week’s trading 57% lower at ₹672.10 from their year high recorded in April last year. Meanwhile, the joint auditors of IndusInd Bank — MP Chitale & Co and MSKA & Associates — wrote to the bank’s board for a forensic audit of the derivatives portfolio, ET reported on Saturday. During an analyst call, CEO Kathpalia confirmed that an external agency had been appointed to review the portfolio, with the final report expected by the end of the fourth quarter.
