RBI assures stability of IndusInd Bank amid speculation, confirms strong financial position

RBI says IndusInd Bank ‘well-capitalized’, ‘financial health stable’

The Reserve Bank of India (RBI) on Saturday, March 15, issued a statement addressing concerns regarding IndusInd Bank Ltd, emphasizing that the bank remains well-capitalized and financially stable. The clarification follows speculation stemming from recent developments related to the bank’s financial position.

According to the RBI, IndusInd Bank reported a Capital Adequacy Ratio of 16.46% and a Provision Coverage Ratio of 70.20% for the quarter ending December 31, 2024. Additionally, the bank maintained a Liquidity Coverage Ratio (LCR) of 113% as of March 9, 2025, exceeding the regulatory requirement of 100%.

“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% and Provision Coverage Ratio of 70.20%. The Liquidity Coverage Ratio (LCR) was at 113% as of March 9, 2025, against the regulatory requirement of 100%,” the RBI stated in its press release.

External audit and remedial measures

The central bank noted that IndusInd Bank has engaged an external audit team to review its internal systems and assess the impact of recent events. The RBI has directed the bank’s Board and management to complete all necessary remedial actions within the current quarter (Q4FY25) and ensure full disclosure to stakeholders.

“Based on the disclosures available in the public domain, the bank has already engaged an external audit team to comprehensively review its current systems and assess the actual impact expeditiously.

The Board and management have been directed by the Reserve Bank to complete the remedial actions within Q4FY25 after making the necessary disclosures to all stakeholders,” the RBI stated.

RBI: No need for depositors to panic

The RBI assured that IndusInd Bank’s financial position remains satisfactory and is under close regulatory monitoring. The central bank urged depositors not to react to speculative reports, as there is no systemic risk to the bank.

Historically, the RBI has safeguarded depositors’ interests in times of financial stress, including interventions in YES Bank (2020), RBL Bank (2021), and earlier cases like the Global Trust Bank collapse (2004) and ICICI Bank’s liquidity concerns (2008). While certain cases, such as PMC Bank (2019), required prolonged resolutions, the RBI has consistently stepped in to protect depositors.

Accounting lapse in derivatives portfolio

The current situation at IndusInd Bank stems from a one-off accounting discrepancy in its derivatives portfolio, rather than a full-blown financial crisis. The bank recently disclosed that an internal review had identified certain discrepancies in this portfolio, which could have a potential adverse impact of about 2.35% of the bank’s net worth as of December 2024.

Despite these concerns, IndusInd Bank continues to maintain strong capital buffers and sufficient liquidity, ensuring that depositors’ funds remain secure.

For all the latest updates, download PGurus App.

The post RBI assures stability of IndusInd Bank amid speculation, confirms strong financial position appeared first on PGurus.