Lagatar24 Desk
Mumbai: The Reserve Bank of India (RBI) has reassured depositors and stakeholders about IndusInd Bank’s financial stability, stating that the bank is well-capitalized and financially sound despite recent concerns.
RBI’s Statement on IndusInd Bank’s Stability
In an official statement released on Saturday, the RBI emphasized that there is no reason for depositors to panic as the bank maintains strong financial health.
“The Reserve Bank would like to state that the bank is well-capitalized and the financial position of the bank remains satisfactory,” the statement read.
For the quarter ending December 31, 2024, IndusInd Bank reported:
• Capital Adequacy Ratio: 16.46%
• Provision Coverage Ratio (PCR): 70.20%
• Liquidity Coverage Ratio (LCR): 113% (as of March 9, 2025), exceeding the regulatory requirement of 100%
The RBI has directed IndusInd Bank to complete all necessary remedial actions within the current quarter (Q4 FY25) and ensure full transparency in its disclosures.
Audit & Internal Review of Financial Processes
The RBI also confirmed that IndusInd Bank has engaged an external audit team to review its current financial systemsand assess any potential discrepancies.
This comes after IndusInd Bank admitted to discrepancies in its internal processes related to other asset and liability accounts of the derivative portfolio following the implementation of the RBI Master Direction on Classification, Valuation, and Operation of Investment Portfolios of Commercial Banks from April 1, 2024.
The bank engaged in internal trades with low liquidity, involving a swap arrangement where yen deposits (3-5 years tenure) were exchanged for dollar deposits (8-10 years tenure) with a multilateral entity.
To ensure complete transparency, IndusInd Bank has appointed an external agency to independently review and validate its internal assessments, with the review expected to be completed by Q4 FY25.
Leadership Challenges Amid Regulatory Scrutiny
IndusInd Bank has also faced leadership challenges in recent months:
• CEO Sumant Kathpalia received only a one-year tenure extension instead of the expected three-year renewal from RBI.
• On January 18, 2025, IndusInd Bank’s CFO resigned, citing other professional opportunities.
RBI Urges Depositors Not to Panic
The RBI reiterated that IndusInd Bank remains financially stable and closely monitored by the central bank.
“There is no need for depositors to react to speculative reports at this juncture. The bank’s financial health remains stable and is being monitored closely by RBI,” the statement concluded.
