The sudden fall in IndusInd Bank’s stock price has raised concerns among investors. The decline came amid reports suggesting potential issues within the bank, leading to panic selling. However, the RBI has stepped in to dispel these concerns, emphasizing that IndusInd Bank remains financially sound.
On March 11, 2025, IndusInd Bank's shares plummeted over 27% to a four-year low following the discovery of accounting discrepancies in forex derivatives, potentially impacting earnings by ₹15 to ₹20 billion. This decline represents the steepest single-session fall since March 2020, raising concerns about the bank's internal controls and financial health.
RBI’s Latest Statement on IndusInd Bank
The RBI has addressed concerns about the financial health of IndusInd Bank, noting that the institution remains stable despite circulating rumors. According to the latest financial results for the quarter ending December 31, 2024:
Capital Adequacy Ratio: 16.46% (indicating strong financial backing).
Provision Coverage Ratio: 70.20% (suggesting adequate provisioning against potential risks).
Liquidity Coverage Ratio (LCR): 113% as of March 9, 2025 (above the regulatory requirement of 100%).
The bank has already engaged an external audit team to review its systems comprehensively. The RBI has directed the bank’s management and board to implement remedial measures within Q4FY25, ensuring full transparency with stakeholders.
No Cause for Panic Among Depositors
The RBI has assured that depositors should not react to speculative reports. The bank’s financial position remains satisfactory, and the central bank continues to monitor the situation closely.
The RBI’s statement reinforces confidence in IndusInd Bank, affirming its resilience and compliance with regulatory requirements. Investors and depositors are advised to rely on official disclosures rather than market speculation.
Recent Financial Performance of Indusind bank
In the third quarter of fiscal year 2024-25 (Q3 FY25), IndusInd Bank reported a net profit of ₹1,402 crores, marking a 39% decrease from ₹2,301 crores in the same quarter of the previous year. This decline is attributed to increased provisions for bad loans, particularly in the microfinance sector, where non-performing assets rose to ₹24.32 billion, comprising 9% of the bank's total loans.
The bank's Net Interest Income (NII) decreased to ₹5,228 crores from ₹5,296 crores year-on-year, with the Net Interest Margin (NIM) contracting to 3.93% from 4.29% in the previous year. Additionally, the Gross Non-Performing Assets (GNPA) ratio deteriorated to 2.25% from 1.92% year-on-year, and the Provision Coverage Ratio (PCR) stood at 70% as of December 31, 2024.
Disclaimer
This article is for informational purposes only and should not be considered financial or investment advice. The views expressed are based on publicly available data and official statements. Readers are advised to conduct their own research or consult a financial expert before making any investment or banking decisions. SensexNifty.com does not take responsibility for any financial losses incurred based on the information provided in this article.
