IndusInd Bank 'stable': RBI assures depositors, dismisses mkt speculation

The Reserve Bank of India issued a statement, assuring the depositors that the bank is well-capitalised and financially stable, and that there is no reason to react to speculative reports

The Reserve Bank of India (RBI) on Saturday dismissed market speculation surrounding IndusInd Bank Ltd, assuring depositors that the bank remains financially stable and well-capitalised. This clarification comes amid concerns triggered by recent developments related to the bank.

 

“As such, there is no need for depositors to react to the speculative reports at this juncture. The bank’s financial health remains stable and is being monitored closely by the Reserve Bank”, RBI said in its statement.

 

According to the RBI, IndusInd Bank’s Capital Adequacy Ratio stood 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.  

   

“As per 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 Liquidity Coverage Ratio (LCR) of the bank was at 113 per cent as of March 9, 2025, as against regulatory requirement of 100 per cent,” the RBI said in a press release.  

 

The central bank also said that IndusInd Bank has already engaged an external audit team to assess its internal systems and account for any financial impact. The RBI has instructed the bank’s board and management to complete all necessary remedial actions within Q4FY25, ensuring full transparency to stakeholders.  

 

“Basis the disclosures available in public domain, the bank has already engaged an external audit team to comprehensively review their current systems, and to assess and account for the actual impact expeditiously,” it said.

 

"The board and the management have been directed by Reserve Bank to have the remedial action completed fully during the current quarter viz., Q4FY25, after making required disclosures to all stakeholders,” the RBI stated.  

 

Earlier this week, the bank informed the exchanges that in an internal review of accounts related to its derivatives portfolio, some discrepancies have been found, which is expected to have a 2.35 per cent impact on the bank’s net worth as of December 2024.

 

“The bank’s detailed internal review has estimated an adverse impact of approximately 2.35 per cent of the bank’s net worth as of December 2024. The bank has also, in parallel, appointed a reputed external agency to independently review and validate the internal findings,” the bank in its exchange notification stated, adding that a final report from the external agency is awaited, and based on that, the bank will appropriately consider any resultant impact on its financial statements.

 

 “The bank’s profitability and capital adequacy remain healthy enough to absorb this one-time impact,” it had further said.

 

Previously, the RBI granted Sumant Kathpalia, the current MD&CEO of the bank only a one-year extension, despite the banks’ board recommending a three-year reappointment.

 

Kathpalia, in an analyst call last week, highlighted the discrepancies found in the derivative portfolio of the bank could be one of the reasons why RBI gave him only a year’s extension.

 

“This would have had an impact because it (RBI) was aware of the issue. There was some inkling of the issue. I don’t know the rationale behind them giving me a one-year extension. But I think it is uncomfortable with my leadership skills in running the bank, and we have to respect that,” Kathpalia said during the analyst call.

 

No cause for panic: RBI to depositors  

 

The RBI reassured depositors that there is no reason to react to speculative reports, as the bank’s financial health remains stable and under close monitoring by the regulator.  

 

The central bank has a proven track record of safeguarding depositors' interests, having intervened in past financial challenges such as YES Bank (2020), RBL Bank (2021), and the Global Trust Bank collapse (2004). Even in prolonged crises like PMC Bank (2019), the RBI has taken steps to protect depositors. However, IndusInd Bank’s situation is different, as the latest financial data confirms no crisis—only an isolated accounting discrepancy.