New Delhi: IndusInd Bank has initiated an independent investigation into discrepancies within its derivatives portfolio. The bank has appointed a professional firm to conduct a detailed examination to identify the root cause of these irregularities and ensure compliance with accounting standards.
The lender had earlier acknowledged discrepancies in its derivatives portfolio, estimating a potential impact of around 2.35 per cent of its net worth as of December 2024. In a fresh regulatory filing, the bank confirmed that the appointed firm will scrutinize the accounting treatment of derivative contracts to assess accuracy and compliance.
Ensuring Transparency in Accounting Practices
The decision to appoint an independent firm comes after the bank’s March 10 disclosure regarding an ongoing external review into the discrepancies. The bank stated that once the investigation is concluded, any necessary adjustments will be made in its financial statements.
According to the filing, the professional firm will not only analyze the correctness of the accounting treatment but will also work towards establishing accountability and identifying potential lapses in internal oversight. This move is seen as a proactive measure to maintain transparency and reinforce investor confidence.
RBI Reiterates Financial Stability Amid Market Concerns
Amid rising speculation regarding the bank’s financial health, the Reserve Bank of India (RBI) has stepped in to reassure depositors. The central bank stated that IndusInd Bank remains financially stable, well-capitalized, and under continuous supervision.
The RBI confirmed that the bank reported a Capital Adequacy Ratio (CAR) of 16.46 per cent and a Provision Coverage Ratio (PCR) of 70.20 per cent as of the quarter ending December 31, 2024. Additionally, the bank's Liquidity Coverage Ratio (LCR) stood at 113 per cent as of March 9, 2025, exceeding the regulatory requirement of 100 per cent.
Strengthening Investor and Depositor Confidence
Despite concerns in the market, the RBI emphasized its strong regulatory oversight and assured that depositors need not worry. The central bank reiterated its commitment to financial stability, highlighting its history of protecting depositors during periods of financial uncertainty.
By taking swift action with an independent probe and maintaining regulatory compliance, IndusInd Bank aims to reinforce trust among stakeholders and address any concerns surrounding its derivative transactions. The outcome of the probe will likely play a crucial role in shaping the bank’s approach to risk management and accounting practices moving forward.
