RBI Reassures Financial Stability of IndusInd Bank Amid Speculation:

The Reserve Bank of India (RBI) has addressed recent speculation surrounding IndusInd Bank Ltd, affirming that the bank remains "well-capitalized" and financially stable.

The central bank's statement follows market concerns triggered by developments in IndusInd Bank’s financial operations.

IndusInd Bank's Financial Performance

As per RBI, IndusInd Bank reported key financial metrics for the quarter ending December 31, 2024:

Capital Adequacy Ratio (CAR): 16.46%
Provision Coverage Ratio (PCR): 70.20%
Liquidity Coverage Ratio (LCR): 113% (as of March 9, 2025, exceeding the regulatory requirement of 100%)

"According to auditor-reviewed financial results, IndusInd Bank has maintained a comfortable Capital Adequacy Ratio of 16.46% and a Provision Coverage Ratio of 70.20%. The Liquidity Coverage Ratio stood at 113% as of March 9, 2025, surpassing the mandatory 100%," the RBI stated.

Regulatory Oversight and Corrective Measures

RBI also noted that IndusInd Bank has initiated an external audit to evaluate its existing systems and assess any necessary corrective measures. The central bank has instructed the bank’s board and management to complete the remediation process within Q4FY25, ensuring full transparency in disclosures to stakeholders.

Derivative Portfolio Discrepancy and RBI’s Response

Earlier this week, IndusInd Bank disclosed irregularities in its derivatives portfolio, which could impact 2.35% of the bank’s net worth as of December 2024. The discrepancy was identified during an internal review.

Following this revelation, RBI has reportedly advised IndusInd Bank’s board to seek external candidates for key leadership positions, including the Chief Operating Officer (COO) and Chief Executive Officer (CEO), as per an Economic Times report.