The Reserve Bank of India (RBI) on Saturday stepped in to allay depositor and investor concerns by stating that IndusInd Bank remains well-capitalised and financially stable.
The RBI has also directed the bank’s board to take remedial action within this month and make required disclosures to all stakeholders.
“According to auditor reviewed financial results of the bank for the quarter ended December 31, 2024, the bank has maintained a comfortable capital adequacy ratio of 16.46 per cent and provision coverage ratio of 70.20 per cent,” the RBI said adding that the liquidity coverage ratio of the bank was at 113 per cent as on March 9, 2025, as against the regulatory requirement of 100 per cent. Maintaining 100 per cent LCR is mandatory which requires banks to maintain high quality liquid assets to meet 30 days net outgo under stressed conditions.
Banking industry sources in Calcutta said that the branches of IndusInd Bank in the city have already been receiving queries from concerned accountholders and the RBI’s statement is likely to assuage their concerns.
IndusInd Bank’s problems began earlier this week following disclosure to the stock exchanges that the RBI approved only a one-year reappointment for MD & CEO Sumant Kathpalia instead of the requested three-year extension. The stocks hit a 52-week low on Monday at the Bombay Stock Exchange. On Tuesday, the bank’s shares fell by an unprecedented 27 per cent after the private sector lender disclosed discrepancies in the accounting of derivatives which it estimated will result in an adverse impact of around 2.35 per cent of the net worth as of December 2024.
IndusInd Bank’s shares, which stood at ₹1046.3 as of February 27, 2025, have fallen by 35.76 per cent to ₹672.10 as of March 13, 2025.
Analysts have worked out the size of the impact to be around ₹2,100 crore stemming from accounting errors in internal trades on forex derivatives/swap transactions, with the bank likely to take a hit in the bottom line as a one-time impact.
“As such, there is no need for depositors to react to speculative reports at this juncture. The bank’s financial health remains stable and is being monitored closely by the Reserve Bank,” the regulator said.
