Ignore speculation, bank remains strong, RBI assures IndusInd Bank depositors

Mumbai: The Reserve Bank of India (RBI) assured IndusInd Bank depositors of its financial stability following recent speculation about its financial health.

The central bank confirmed that the bank remains well-capitalised and there is no cause for concern among depositors.

“…there is no need for depositors to react to the speculative reports at this juncture,” the central bank said in a statement on its website.

It further added that the bank’s financial health remains stable and is being monitored closely by the Reserve Bank.

According to the RBI, IndusInd Bank reported a Capital Adequacy Ratio (CAR) of 16.46 per cent and a Provision Coverage Ratio (PAR) of 70.20 per cent for the quarter ending December 31, 2024.

The bank also maintained a Liquidity Coverage Ratio (LCR) of 113 per cent as of March 9, 2025, which is well above the regulatory requirement of 100 per cent.

These figures indicate that the bank has sufficient financial strength to meet its obligations, the central bank said in a statement.

The RBI further noted that IndusInd Bank has engaged an external audit team to review its systems and assess the impact of recent developments.

The bank’s Board and management have been directed to complete all necessary remedial actions within the current quarter (Q4 FY25) and ensure proper disclosures to stakeholders.

In its statement, the RBI emphasised that depositors should not react to speculative reports, as the bank’s financial position remains sound and is under its close monitoring.

The central bank also highlighted its strong track record in protecting depositors during financial uncertainties.

In the past, the RBI has stepped in to safeguard depositors’ interests in cases like with the Yes Bank in 2020, the RBL Bank in 2021, and even historical crises such as the Global Trust Bank collapse in 2004 and ICICI Bank’s liquidity concerns post-Lehman crisis in 2008.

The current situation at IndusInd Bank is not a crisis but a one-time accounting discrepancy. Earlier this week, the bank disclosed that it had identified discrepancies in its derivatives portfolio, which could have an impact of about 2.35 per cent of its net worth as of December 2024.

However, the bank is taking corrective measures to address the issue, according to its official statement.

–IANS