3 min readMumbaiMar 16, 2025 08:22 AM IST
First published on: Mar 15, 2025 at 09:50 PM IST
The Reserve Bank of India (RBI) on Saturday said that IndusInd Bank depositors need not worry since the bank’s financial health remains stable.
“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 regulator said in a statement. The bank’s deposits grew by 11 per cent year-on-year to Rs 4,09,438 crore as of December 2024.
The bank had last week revealed a potential 2.35 per cent adverse impact on its net worth after an internal review of its derivative portfolio. The derivative losses will have an approximate impact of Rs 2,100 crore on the bank.
The bank is well-capitalised and the financial position of the bank remains satisfactory, the RBI said. “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 RBI said.
The liquidity coverage ratio (LCR) of the bank was at 113 per cent as on March 9, 2025, as against regulatory requirement of 100 per cent. “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,” the central bank said.
The RBI 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.
IndusInd shares declined by 1.84 per cent to Rs 672.10 on the BSE on Thursday.
As per RBI directives on investments issued in September 2023, banks are prohibited from conducting internal trades/ hedging and, accordingly, IndusInd Bank too ceased internal trades from April 1, 2024. However, during an internal review, the bank identified certain discrepancies where accounting of losses on forex derivatives/ swap transactions executed prior to April 2024 (over the past 5-7 years) to hedge forex deposits/ debt were not recognized through NII (net interest income), while the corresponding treasury gains were recognized in the P&L.
“These accumulated losses (pre-tax Rs 2,100 crore and post-tax Rs 1,580 crore) are estimated to have an adverse impact of 2.35% on its networth as of December 2024. The bank clarified that it will take the hit through P&L which, coupled with accelerated provisions on the MFI portfolio, will push the bank into losses during Q4FY25 and drive down the FY25E RoA (return on assets) by 30 bps to 0.9 per cent,” Emkay Global Financial Services said in a report. The bank reported a net profit of Rs 1,401 crore during the December quarter of FY2025.
The bank has hired an external agency to review and validate the findings, and had intimated the RBI a week ago about its preliminary findings.
The bank is well-capitalised and the financial position of the bank remains satisfactory, the RBI said. (Photo: Reuters) 
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