IndusInd Bank Ltd, a private-sector lender based in India, saw a 3% rise in its share price on March 17, 2025, following a statement from the Reserve Bank of India (RBI) that reaffirmed the bank’s strong financial position. This comes amid concerns over discrepancies in the bank’s derivatives portfolio, which could impact its profitability.
Shares of IndusInd Bank Ltd., a leading private-sector bank in India, surged by 3% after the Reserve Bank of India (RBI) issued a statement affirming the bank’s strong financial position. This announcement comes in the wake of concerns over discrepancies in the bank’s derivatives portfolio, which raised investor concerns regarding its financial health.
IndusInd Bank, headquartered in Mumbai, Maharashtra, offers a wide range of banking and financial services, catering to both corporate and retail clients. The bank is known for its robust financial infrastructure and has consistently maintained a strong capital base.
The RBI, India’s central banking authority, stated that IndusInd Bank’s financial metrics remain stable, highlighting a Capital Adequacy Ratio of 16.46% and a Provision Coverage Ratio of 70.2% for the quarter ending December 31, 2024. Furthermore, the bank’s Liquidity Coverage Ratio (LCR) stood at 113% as of March 9, 2025, exceeding the regulatory requirement of 100%.
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% and Provision Coverage Ratio of 70.2%. The Liquidity Coverage Ratio (LCR) of the bank was at 113% as on March 9, 2025, as against the regulatory requirement of 100%.”
RBI
At 9:25 AM on March 17, IndusInd Bank’s stock was trading at Rs 691.85, reflecting a 2.9% increase from the previous session’s close. The RBI’s reassurance has helped ease market concerns, stabilizing investor confidence in the bank’s financial standing.
Concerns Over Derivatives Portfolio
The RBI’s statement follows concerns that emerged after an internal review of IndusInd Bank’s derivatives portfolio revealed certain discrepancies. According to a company filing dated March 10, 2025, these issues could result in an estimated adverse impact of 2.35% on the bank’s net worth. Sources indicate that the financial impact could amount to approximately Rs 1,500 crore.
In response, the RBI has directed IndusInd Bank’s board and management to complete remedial measures within the fourth quarter of FY25 and make the necessary disclosures to stakeholders.
IndusInd Bank’s Chief Executive and Managing Director, Sumant Kathpalia, addressed the issue during an analyst call, acknowledging the financial impact. “I think general reserves cannot be touched, and we’ll have to take it to the P&L,” he stated, indicating that the bank will account for the discrepancy in its profit and loss statement.
Outlook for IndusInd Bank
Despite these recent concerns, IndusInd Bank continues to maintain a strong capital base, as confirmed by the RBI. The bank has consistently reported stable financial performance, and analysts suggest that its ability to comply with regulatory requirements indicates resilience.
As the fourth quarter of FY25 progresses, investors and analysts will closely monitor IndusInd Bank’s financial disclosures and remedial measures to assess its long-term stability. The RBI’s confirmation of the bank’s well-capitalized status has provided a short-term boost to investor confidence, but the bank’s ability to navigate the derivatives discrepancy will be crucial in maintaining its market position.
With ongoing regulatory oversight and proactive management strategies, IndusInd Bank remains a key player in India’s banking sector, reinforcing its commitment to financial stability and growth.
