The IndusInd Bank episode has played out and the bank is performing well, senior officials at the Reserve Bank of India (RBI) told reporters here today.
“Banking system as a whole is very robust. These events will happen, they should not bother us too much as long as there are far and few and limited. I think the bank has taken number of steps to improve their accounting and other practices and, on the whole, I think the bank is doing well,” said RBI Governor Sanjay Malhotra.
RBI Deputy Governor Swaminathan J, meanwhile, said the regulator’s prime priority was for the private bank to correct its accounting practices and take financial hit in Q4 FY25 itself. The regulator had sought a forensic audit and accountability report from the lender on the said discrepancies, which have been complied with.
“We had said that each of these crises gives us some lessons. We sharpened our supervisory tools and we calibrated our supervisory approach based on our lessons learned from this. Going forward, we will look for such red flags,” said Swaminathan.
“Whatever that was supposed to play out over the last three months has played out. It is more or less on track, and I am sure that it should be, if not immediately, but at least very soon it should settle down and then be back to normal,” he added.
Fraud committed
Due to the adverse impact of various accounting discrepancies, IndusInd Bank reported a consolidated net loss of ₹2,329 crore in Q4FY25. The lender’s net interest income fell 43 per cent year-on-year (y-o-y) to ₹3,048 crore, while other income fell 72 per cent on-year to ₹709 crore. Net interest margin fell sharply to 2.25 per cent from 3.93 per cent a quarter ago. Separately, the auditors of the bank also said basis the involvement of senior officials of the bank in the accounting errors, they suspect that a fraud has been committed against the bank.