IndusInd Bank will resolve forex derivative discrepancies by March 31, 2025, assures RBI with no immediate impact on stability.
The Reserve Bank of India (RBI) confirmed through statements that IndusInd Bank maintains financial stability and enough capital. Recent doubts regarding the bank’s foreign exchange derivative portfolio discrepancies led the central bank to react. These discrepancies affecting depositors require no cause for concern because the central bank predicts two weeks of resolution. The RBI assures that IndusInd Bank maintains strong financial ratios that keep the institution safely operating.
Discrepancies in Forex Derivative Portfolio
Foreign exchange derivative portfolio valuation issues appeared at IndusInd Bank on March 10, 2025. The bank confessed that protection mechanisms against foreign currency borrowings received incorrect valuations. The incorrect valuations could decrease pre-tax earnings of the financial year by Rs 2,100 crore. The bank made the disclosure of its own accord while showcasing its commitment to addressing problems quickly.
The financial institution IndusInd Bank has enlisted an external audit team to determine all aspects of the discrepancy problems. Outside professionals will examine all systems before performing detailed investigations about actual consequences. The bank’s board, together with the management team, is actively working to address the problem before the current financial period ends. The RBI ordered IndusInd Bank to complete its remedial procedure before March 31, 2025.
No Immediate Concerns for Depositors
Despite the inconsistencies, the Reserve Bank of India (RBI) has informed depositors they do not need to act based on speculations about bank stability issues. The central bank asserted that IndusInd Bank stands in robust financial condition because its Capital Adequacy Ratio (CAR) reached 16.46%. The bank displays capital reserves that go beyond regulatory criteria because its CAR ratio exceeds 16.46% at current levels.
A financial assessment demonstrated that the bank possesses a 70.20% Provision Coverage Ratio, indicating its ability to handle probable losses. On March 9, 2025, the LCR at IndusInd Bank reached 113%, surpassing the regulatory minimum threshold of 100%. The bank presents a financially strong aspect that stems from its superior ratios, which resulted from imbalances in forex derivatives.
RBI’s Guidance on Remediation Process
The RBI has granted IndusInd Bank an upcoming financial quarter to accomplish all necessary remedial activities. These actions involve solving valuation problems and making essential disclosure statements to stakeholders. The RBI declared in its statement that the monetary discrepancies would not harm the banking system’s financial stability at this time. The bank will recover complete operational trust after successfully and promptly resolving these issues.
A stable assessment of AA+ maintains IndusInd Bank’s original rating assigned by India Ratings. The RBI implemented this decision to promote stability while offering immediate, transparent solution methods for every detected issue. The monitoring system tracks down problems, while bank officials connect directly with the central bank to fulfil demands on time.
