IndusInd Bank to hire independent firm to probe derivatives discrepancies

The firm will assess the correctness and impact of accounting treatment of derivative contracts in accordance with prevailing accounting standards, identify any lapses, and establish accountability

IndusInd Bank informed the exchanges on Thursday that its board has decided to appoint an independent professional firm to conduct a comprehensive investigation to identify the root cause of the discrepancies in the bank’s derivative portfolio.

 

Additionally, the firm will assess the correctness and impact of the accounting treatment of derivative contracts in accordance with prevailing accounting standards, identify any lapses, and establish accountability.

 

The private sector lender had disclosed on March 10 that an internal review found discrepancies in its derivative portfolio, which would have an impact of over 2 per cent on its net worth.

 

Further, it also revealed that the bank had appointed an external agency, PwC, to conduct a review, whose report is still awaited.

 

 

Following these revelations, the Reserve Bank of India (RBI) had to step in to address speculations surrounding the bank. In a rare statement, the RBI assured that the private sector lender remains well-capitalised and financially stable.

 

The RBI also sought to calm depositors’ concerns, stating that there was no need for them to react to speculative reports. It affirmed that the bank’s financial health is stable and is being monitored closely by the central bank.

 

IndusInd Bank’s Capital Adequacy Ratio stands at 16.46 per cent, while the Provision Coverage Ratio was 70.20 per cent for the quarter ending December 31, 2024. Additionally, the Liquidity Coverage Ratio (LCR) was 113 per cent as of March 9, 2025, comfortably surpassing the 100 per cent regulatory requirement.

 

Since the bank’s disclosure on March 10, its shares have lost over 31 per cent in value. On Thursday, the shares closed at Rs 683.80 on the BSE.

 

Meanwhile, IndusInd Bank’s promoter has assured that they are ready to inject additional capital if required. However, the bank remains well-capitalised, and there is no immediate need for additional capital.

 

Separately, the bank has been borrowing heavily from the certificate of deposit (CD) market. Since its disclosures, the private sector lender has raised around Rs 15,000 crore in CDs at elevated rates from state-owned banks and mutual funds, among others.