IndusInd Bank witnessed a significant boost in the stock market on Monday. As markets opened the first trading session of the week, the lender’s shares climbed 5.2 per cent to reach a high of Rs 707 apiece on the BSE.
This surge in the stocks followed an announcement from the Reserve Bank of India (RBI) on Saturday, wherein, the regulator reassured depositors that the bank remained financially stable and well-capitalised, reported The Economic Times. In its statement, the central bank said, “The bank is well-capitalised, and its financial position remains satisfactory.”
By 10:34 AM, the bank’s shares eased their rally but remained in green. On the BSE, the shares of IndusInd Bank traded at Rs 694.50 apiece, logging a gain of more than 3 per cent in the day.
IndusInd Bank’s Financial Health Indicators
Notably, the bank’s financial report for the October-December 2024 quarter, reviewed by auditors, revealed that the lender maintained a robust Capital Adequacy Ratio (CAR) of 16.46 per cent in the period and a Provision Coverage Ratio (PCR) of 70.20 per cent. Furthermore, as of March 9, 2025, its Liquidity Coverage Ratio (LCR) stood at 113 per cent, exceeding the mandatory 100 per cent requirement set by regulators.
The CAR helps understand the financial strength and stability of a bank, while the PCR indicates how prepared the bank is for potential losses. A higher PCR means the bank has set aside sufficient provisions to cover possible losses from non-performing assets (NPAs).
The RBI added that an external audit team was already in place by the IndusInd Bank to conduct a detailed evaluation of its systems and assess the full extent of any financial discrepancies.
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Ongoing Developments and Market Reactions
To address any identified concerns, the RBI instructed the bank’s board and management to carry out remedial actions within the fourth quarter of the financial year 2025 (Q4FY25). The regulator also mandated the bank to ensure transparency by fully disclosing relevant information to all stakeholders.
With heightened speculation surrounding IndusInd Bank’s financial health, the RBI urged depositors to disregard unverified reports, emphasising that the bank remained under close regulatory supervision.
The controversy surrounding the bank intensified after the RBI extended the tenure of CEO Sumant Kathpalia by one year. Soon after, the bank reported accounting irregularities in its derivatives portfolio, with an estimated Rs 1,600 crore impact on its balance sheet.
Media reports also claimed that the bank’s joint auditors, MP Chitale & Co and MSKA & Associates, approached the board to request a forensic audit of the derivatives portfolio. During an analyst call, CEO Kathpalia confirmed that an external agency has been assigned to examine the portfolio, with the findings expected by the end of the fourth quarter.
Additionally, PwC was enlisted to conduct an accounting review of the derivatives portfolio, although the report is yet to be released. Meanwhile, the Institute of Chartered Accountants of India (ICAI) is also expected to scrutinise the bank’s financial records after taking suo-motu cognizance of the disclosed discrepancies in the forex derivatives portfolio.
