IndusInd bank well-capitalised; no need for depositors to worry: RBI

TOI Business Desk / TIMESOFINDIA.COM / Mar 15, 2025, 14:26 IST

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The Reserve Bank of India confirmed IndusInd Bank's strong financial parameters and robust health amid reported discrepancies. IndusInd Bank is implementing remedial measures and undergoing an external audit. Despite leadership changes and internal process issues, the bank remains financially stable.

IndusInd bank well-capitalised; no need for depositors to worry: RBI

The Reserve Bank of India (RBI) reassured depositors and stakeholders about IndusInd Bank’s financial health, saying that the bank is well-capitalised and remains stable despite ongoing concerns.
In a statement released on Saturday, the central bank said, "The Reserve Bank would like to state that the bank is well-capitalised and the financial position of the bank remains satisfactory."
The apex bank said that for the quarter that ended on December 31, 2024, the bank maintained a capital adequacy ratio of 16.46 per cent and provision coverage ratio of 70.20 per cent.
“Additionally, the bank’s Liquidity Coverage Ratio (LCR) stood at 113 per cent as of 9 March 2025, exceeding the regulatory requirement of 100 per cent,�?the bank said in a press release.

The central bank also noted that IndusInd Bank has engaged an external audit team to review its current systems and assess any financial impact promptly. The bank’s board and management have been directed to complete all remedial actions within the current quarter (Q4FY25) and make the necessary disclosures to stakeholders.
“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 Reserve Bank.," the statement added.
The clarification followed IndusInd Bank’s own admission of discrepancies in its internal processes related to to other asset and other liability accounts of the derivative portfolio, post implementation of RBI Master Direction - Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2023 issued in September 2023, including accounting of Derivatives, applicable from April 01, 2024.
The bank engaged in internal trades with low liquidity, involving a swap arrangement where yen deposits with a tenure of 3�? years were exchanged for dollar deposits with a tenure of 8�?0 years for a multilateral entity.
In response, IndusInd Bank appointed an external agency to independently review and validate its internal findings, with the review expected to be completed by the fourth quarter.
Meanwhile, leadership changes have added to the bank’s challenges. Earlier this month, RBI granted CEO Sumant Kathpalia a one-year tenure extension, despite expectations of a three-year renewal. On 18 January 2025, the bank’s CFO also resigned, citing other professional opportunities.

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