In an attempt to allay fears of IndusInd Bank customers over the lender’s viability, the Reserve Bank of India (RBI) on Saturday said the private lender remains financially stable and well-capitalised. This clarification follows the bank’s disclosure on Monday that an internal review of its derivatives portfolio revealed discrepancies that could hit its net worth by approximately 2.35% as of December 2024.
“There has been some speculation relating to IndusInd Bank in certain quarters, perhaps arising from recent events related to the bank. The Reserve Bank would like to state that the bank is well capitalised and the financial position of the bank remains satisfactory,” RBI said in a statement.
There is no need for depositors to react to speculative reports at this juncture, added the banking sector regulator.IndusInd Bank reported a capital adequacy ratio of 16.46% and a provision coverage ratio of 70.20% for the quarter that ended on December 31, 2024.
The bank also maintained a liquidity coverage ratio (LCR) of 113% as of March 9, exceeding the regulatory requirement of 100%, according to the RBI.RBI has directed the board and management of IndusInd Bank to complete remedial action within the current quarter. “The Board and the management have been directed by Reserve Bank to have remedial action completed fully during the current quarter, Q4FY25, after making required disclosures to all stakeholders,” said the RBI statement.
Shares of IndusInd Bank crashed on Tuesday after the bank informed stock exchanges that it had discovered an accounting discrepancy, prompting the private lender to appoint an external agency to independently review its internal findings. Following the announcement, shares plunged 27% to Rs 656 per share.
The shares staged a recovery the following day, closing at Rs 685, but traded below Rs 700 for the remainder of the week, eventually closing at Rs 672 per share on Friday on the Bombay Stock Exchange. On March 7, the RBI granted CEO Sumant Kathpalia a one-year extension, against the board application for a three-year extension.