RBI gives Indusind Bank three months time to fix its problems
The bank reported a 39% drop in its standalone net profit in the December quarter to Rs 1,401 crore as against Rs 2,298 crore in the same quarter last year. However, the profit after tax (PAT) was higher than Street estimates at Rs 1,282 crore.
The Reserve Bank of India (RBI) on Saturday asked the board of directors of IndusInd Bank to complete corrective action amid revelations of massive accounting irregularities of Rs 2,100 crore declared by the bank during the current quarter.
Indusind Bank had disclosed accounting irregularities this week. This is estimated to have a 2.35 percent impact on the net worth of the bank. Immediately after the disclosure, the bank's share price saw a sharp decline.
Based on the publicly available disclosures, the bank has already appointed an external audit team to conduct a comprehensive review of its existing mechanisms and to assess and account for the actual impact, the RBI said in a statement.
RBI gave three months' time
The central bank said, the board and management have been directed by the Reserve Bank to complete full corrective action during the January-March quarter, after making the necessary disclosures to all stakeholders. The statement said that there is no need for depositors to react to speculation at this time.
The central bank assured customers and investors that the bank's financial position remains stable and it is monitoring it closely.
Indusind Bank said that the accounting lapses were detected around September-October last year and the bank had given preliminary information about this to the RBI last week.
According to the bank, the final number will be known when the external agency appointed by the bank finalizes its report in early April.
Indusind Bank third quarter results
The bank reported a 39% drop in its standalone net profit in the December quarter to Rs 1,401 crore as against Rs 2,298 crore in the same quarter last year. However, the profit after tax (PAT) was higher than Street estimates at Rs 1,282 crore.
Net interest income (NII) stood at Rs 5,228 crore as against Rs 5,296 crore in Q3 FY24. Net interest margin declined to 3.93% from 4.29% in Q3 FY24 and 4.08% in Q2 FY25.
Indusind Bank shares
On Monday, Indusind Bank shares closed down 3.9% at Rs 900.6 on the BSE, while the benchmark Sensex declined 0.29%. The stock has declined 42% in the last 12 months and 1% in the last five years. The company's market capitalisation is Rs 70,161 crore.
