RBI says external audit of IndusInd Bank underway, affirms bank is well-capitalised

Amidst the ongoing controversy over IndusInd Bank’s forex derivatives discrepancies, Reserve Bank of India (RBI) has issued a statement on Saturday saying that the private sector bank is “well-capitalised” and holds a “satisfactory” financial position.

“There has been some speculation relating to IndusInd Bank Ltd. in certain quarters, perhaps arising from recent events related to the bank. The Reserve Bank would like to state that the bank is well-capitalised, and the financial position of the bank remains satisfactory,” said RBI in a statement issued on March 15.

“As per auditor-reviewed financial results for the quarter ended December 31, 2024, the bank has maintained a comfortable Capital Adequacy Ratio of 16.46% and Provision Coverage Ratio of 70.20%,” said RBI.

Adding that the bank has a Liquidity Coverage Ratio of 113% (above the 100% regulatory requirement), RBI states that the bank has already engaged an external audit team to review systems and assess actual impact.

“Basis the disclosures available in public domain, the bank has already engaged an external audit team to comprehensively review their current systems, and to assess and account for the actual impact expeditiously,” RBI said.

This suggests that despite the multiple crores hit from the derivatives issue, the bank has enough capital and liquidity to absorb the loss without immediate financial strain.

“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,” RBI added.

Advising depositors to not react to the speculative reports at the moment, RBI said IndusInd Bank’s financial health is currently stable and it continues to monitor the same.

On March 10, Fortune India reported that IndusInd Bank admitted to accounting discrepancies in its forex derivatives portfolio, leading to an estimated ₹1,529.90 crore (2.35% of net worth) loss. The issue, spanning 5–7 years until March 31, 2024, was discovered in an internal review, raising concerns over inflated profits and auditing failures. 

This discrepancy arose from underestimating hedging costs related to past forex dealings. The bank cited the need for accurate impact assessment as the reason for the delayed disclosure, which coincided with the CFO’s January exit and the CEO’s reduced one-year extension. 

The loss, to be adjusted in Q4 FY25 financials, will primarily impact net interest income. Investor confidence thus, has plummeted, wiping out market value as IndusInd Bank’s shares plunged 27.2% on Tuesday to ₹655.95—their steepest single-day fall since listing.