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The RBI directs the IndusInd Bank to fully complete the IndusInd Bank to fully complete, and says that ‘there is no need for depositors to react to the speculative report on this turn’.
Earlier this week, IndusInd Bank revealed accounting discrepancies in its derived portfolio related to foreign exchange hedging, which could affect its total assets with Rs 1,500 crore.
IndusInd Bank reported discrepancies leading to financial loss in its derivative accounting, the Reserve Bank of India (RBI) said on Saturday that the private sector lender has been well capitalized and its financial condition is satisfactory. This directed IndusInd Bank to fully complete it completely by the end of this month.
The RBI said in a statement, “According to the bank’s Auditor-reviewed financial results for the quarter ended December 31, 2024, IndusInd Bank has maintained a provision of 16.46 percent comfortable capital adequacy ratio and a provision of 70.20 percent. The bank’s liquidity coverage ratio (LCR) was 113 percent against the 100 percent regulatory requirement on March 9, 2025. ,
On derivative accounting discrepancies, the RBI stated that “based on the revelations available in the public domain, the bank has already attached an external audit team to make a comprehensive review of its current systems, and to assess for real impact and rapid assessment in the account.
According to experts, it can potentially affect the total assets of the IndusInd Bank up to Rs 1,500 crore. Some reports ate it at Rs 2,100 crore.
It said that the RBI has directed the Board and Management of IndusInd Bank that after making necessary revelations to all stakeholders, therapeutic action has been fully completed during the current quarter.
“In this way, there is no need for depositors to react to the speculative report at this turn. The central bank said that the financial health of the bank remains stable and is being closely monitored by the Reserve Bank.
What is the issue in IndusInd Bank?
Earlier this week, IndusInd Bank revealed accounting discrepancies related to forex hedging in its derived portfolio.
In a regulatory filing on 10 March, IndusInd Bank informed that during the internal review of the processes related to derivative portfolio, it referred to some anomalies in the balance of the account.
A detailed internal review of the IndusInd Bank based in Mumbai has estimated about 2.35 percent impact of the bank’s net worth by December 2024, in a statement.
The investors released in September 2023 were reviewed following the RBI instructions on the investment portfolio, which belongs to the ‘other assets and other liability’ accounts of the portfolio.
This can potentially affect the total assets of the IndusInd Bank more than Rs 2,100 crore.
After this disclosure, IndusInd Bank made an analyst call and said that an external auditor is reviewing the case, with the expected report by the end of March 2024.
However, IndusInd Bank clarified that profitability and capital adequacy remains healthy to absorb this one -time impact.
Earlier, the Reserve Bank of India (RBI) extended the tenure of the CEO for only one year against the three years sought by the private sector lender. According to an Economic Times report, the RBI asked the bank’s board to find external candidates for the post of COO and CEO.
