IndusInd Bank ‘Well-Capitalised’, ‘Stable’: RBI on Rs 2,100 Crore Accounting Discrepancy

IndusInd Bank is well-capitalised and its financial position remains satisfactory, said the Reserve Bank of India on Saturday, urging its depositors to not react to the speculative reports at the present juncture. The central bank's statement came days after IndusInd Bank discovered an accounting discrepancy worth Rs 2,100 crore in the way it booked currency derivatives.

"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 per cent and Provision Coverage Ratio of 70.20 per cent," the RBI added in its statement.

IndusInd Bank share price down 25% in one week

IndusInd Bank shares declined over 25% in the past five trading sessions and closed to Rs 672.65 per share on BSE. The massive stock value decline weakens investors' sentiment, adding on to the worries of depositors of IndusInd Bank. The bank's market capitalisation stands at Rs 52,360.25 crore on BSE on Saturday and its stock hit its 52-week lowest mark of Rs 605.40 apiece on BSE on March 12.

RBI directs IndusInd Bank to complete remedial actions in the current quarter

The RBI has directed the IndusInd Bank board of directors to complete the remedial action during the current financial year ending 31 March 2025. RBI in its statement, assured the public that the bank has already "engaged an external audit team to comprehensively review their current systems" based on disclosures available in the public domain.
"The Board and the management have been directed by Reserve Bank to have the remedial action completed fully during the current quarter viz., Q4FY25, after making required disclosures to all stakeholders. As such, there is no need for depositors to react to the speculative reports at this juncture. The bank's financial health remains stable and is being monitored closely by Reserve Bank," RBI added in its statement.

IndusInd Bank accounting discrepancy

IndusInd Bank had earlier informed that it discovered an accounting lapse worth Rs 2,100 crore around September- October last year. The bank gave a preliminary update to the central bank about the accounting lapse in March last week. The exact number and other details about accounting lapses are yet to be confirmed by the external agency, which the bank has appointed for the audit. The external agency will likely finalise this report by April.
In an exchange filing, IndusInd Bank pointed out some discrepancies that it observed during the internal review of the process. Amid rising concerns about IndusInd Bank's financial position, the bank last week assured that it has enough reserves and capital to cover for it. IndusInd Bank CEO and Managing Director Sumant Kathpalia said that the accounting lapse was noted around September-October last year and the bank gave a preliminary update to the RBI about this last week.

The final number will be known after the external agency, which the bank has appointed, finalises its report by early April. As per IndusInd Bank's stock exchange filing, the accounting discrepancies discovered last year could have an adverse impact of about 2.35 per cent of the bank's net worth as of December 2024 as per its internal review.