IndusInd Bank Crisis: From accounting discrepancies to CEO tenure and RBI’s remedial suggestions, the IndusInd bank crisis hasn’t stopped. The bank is facing consequences, and it is thus important to know everything about the IndusInd bank crisis.
Overview of IndusInd Bank
One of the top brands in India for financial services is IndusInd Bank. They are the go-to partner and supplier of banking solutions for almost 42 million clients nationwide, including PSUs, big businesses, individuals, and different government agencies. Their banking network includes 2993 automated teller machines (ATMs) and 3063 branches/banking outlets dispersed throughout 1,60,000 villages in India. The bank provides a broad range of services and products for both individuals and businesses, such as:
Credit cards,
SME loans,
Personal loans,
Microfinance,
Loans for both personal & business vehicles.
IndusInd Bank & ICAI
The ICAI, the premier body for chartered accountants, has the authority to examine IndusInd Bank’s financial records. The bank is battling accounting irregularities worth an estimated Rs. 2,100 crore. According to an internal review, the private sector lender revealed several disparities in its futures portfolio on March 10 that could negatively affect roughly 2.35 percent of the net worth of the bank as of Dec 2024.
RBI News on IndusInd Bank
The RBI (Reserve Bank of India) declared on Saturday that the private sector lender is adequately capitalized and that its financial situation is still good, days after IndusInd Bank revealed inconsistencies in their derivatives accounting that resulted in losses. Additionally, it mandated that IndusInd Bank finish the remedial measure by the end of this month.
Corrective Measures
In a statement, the RBI stated that IndusInd Bank has maintained a satisfactory capital adequacy ratio of 16.46 percent and a 70.20 ratio of provision coverage percent for the quarter that ended on December 31, 2024, based on the bank’s auditor-reviewed financial statements. By March 9, 2025, the bank’s LCR (Liquidity Coverage Ratio) was 113%, which was below the 100% legal threshold.
Thus, IndusInd Bank has been instructed by the RBI to finish all the required corrective measures this quarter (Q4 FY25) and make sure that stakeholders are properly informed. Additionally, the RBI has declared that it is investigating certain banks’ involvement in derivatives.
IndusInd Bank Crisis: Effect on IndusInd Bank Shares
The bank’s share price fell precipitously after the accounting discrepancy was revealed; analysts modified their target prices for IndusInd Bank shares to account for the heightened uncertainty, and investor confidence was also impacted by doubts about the bank’s credibility. Due to the IndusInd Bank crisis, the shares of the bank are in a continuous trend.
Conclusion
Although the accounting disparity has sparked worries, the RBI’s remarks are meant to assure the public that IndusInd Bank is financially stable overall. The RBI is keeping a close eye on the matter and has instructed the bank to make amends. Investor trust is sensitive to perceived financial irregularities, as evidenced by the market’s response. Due to the IndusInd Bank crisis, it’s critical to abide by official pronouncements from the bank and the RBI.
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