Key Points
Independent firm to investigate derivative portfolio accounting discrepancies
RBI confirms bank's financial health remains stable
Potential impact estimated at 2.35% of net worth
Comprehensive investigation to identify root causes
Last 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.
In a fresh statement to the stock exchanges, the bank said this independent firm will conduct a comprehensive investigation to identify the root cause of the recently disclosed accounting discrepancies.
This firm will assess the correctness and impact of the accounting treatment of the derivative contracts with regard to the prevailing accounting standards.
"On 10th March 2025, the Bank had disclosed the ongoing review by an external agency, of certain discrepancies identified by the Bank, in its account balances relating to its derivative portfolio and that, once completed, the Bank will appropriately reflect any resultant impact in its financial statements," read the stock exchange filing.
In addition, the Board of Directors at its meeting decided to appoint an independent professional firm "to conduct a comprehensive investigation to amongst others, identify the root cause of the discrepancies, assess the correctness and impact of the accounting treatment of the derivative contracts with regard to the prevailing accounting standards/ Guidance, identify any lapses and establish accountability," the filing further stated.
The bank had earlier said that an external agency was validating the findings of the bank's internal review.
The Reserve Bank of India (RBI) has already 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.
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.
The central bank also highlighted its strong track record in protecting depositors during financial uncertainties.
