MOHAMMAD ZIYAUDDIN
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RBI Reassures Stability of IndusInd Bank Amid Derivatives Portfolio Concerns
The Reserve Bank of India (RBI) has addressed concerns surrounding IndusInd Bank, affirming that the private lender remains well-capitalized and financially stable. The statement comes in response to recent speculation triggered by discrepancies in the bank’s derivatives portfolio.
IndusInd Bank's Financial Strength: Key RBI Highlights
Capital Adequacy Ratio (CAR): 16.46% (as of December 31, 2024)
Provision Coverage Ratio (PCR): 70.20%
Liquidity Coverage Ratio (LCR): 113% (as of March 9, 2025, well above the required 100%)
"As per auditor-reviewed financial results, the bank has maintained a comfortable capital adequacy ratio and a strong liquidity position," the RBI stated.
The central bank also confirmed that IndusInd Bank has engaged an external audit team to review its systems and assess the full financial impact of the issue.
Derivatives Portfolio Discrepancy: What Went Wrong?
Earlier this week, IndusInd Bank disclosed discrepancies in its derivatives portfolio, which could impact approximately 2.35% of the bank’s net worth as of December 2024.
The issue was uncovered during an internal review, prompting the RBI to step in and monitor the situation closely.
The bank’s board and management have been directed to complete corrective measures within Q4FY25 and make all necessary disclosures to stakeholders.
"The bank has engaged an external audit team to comprehensively review its current systems and expedite the assessment of the actual impact," the RBI statement added.
RBI Advises Leadership Overhaul at IndusInd Bank
Following the derivatives portfolio disclosure, the RBI has reportedly advised IndusInd Bank’s board to consider external candidates for the roles of Chief Operating Officer (COO) and Chief Executive Officer (CEO), as per an Economic Times report.
The move signals potential leadership changes as the bank works to regain investor confidence and reinforce governance.
No Immediate Risk, But Close Monitoring Continues
While IndusInd Bank faces short-term financial strain, the RBI’s reassurance and the bank’s strong liquidity and capital position indicate no immediate systemic risk.
However, with an external audit underway and leadership changes likely, the coming months will be crucial in restoring investor trust and ensuring regulatory compliance.
What’s Next?
- Audit findings expected soon to determine the full financial impact.
- Possible leadership restructuring at the bank.
- Continued RBI oversight to prevent further discrepancies.
