IndusInd Bank on March 10 said it has identified discrepancies in its derivative portfolio following an internal review of its “Other Asset” and “Other Liability” accounts.
The issue arose after the implementation of the Reserve Bank of India’s (RBI) Master Direction on Classification, Valuation, and Operation of Investment Portfolio of Commercial Banks (2023), which took effect from April 1, 2024.
According to a disclosure made to stock exchanges, the bank estimates an adverse impact of approximately 2.35% of its net worth as of December 2024 due to these discrepancies.
To ensure accuracy, IndusInd Bank has also engaged an independent external agency to validate its internal findings. The final report from the external agency is awaited, after which the bank will incorporate any necessary adjustments in its financial statements.
Despite the setback, the bank assured investors that its profitability and capital adequacy remain strong enough to absorb the one-time impact.
The matter was discussed in a board meeting that began at 4:12 p.m. IST and concluded at 6:25 p.m. IST on Monday, following which the board continued deliberations on other agenda items.
IndusInd Bank has hosted the disclosure on its official website, www.indusind.com, and has requested stock exchanges to take note of the development.
Market Reaction and Outlook
While investors are expected to scrutinize the potential financial implications of the discrepancies, the bank’s assurance of strong capital adequacy may help contain negative sentiment.
Market participants will closely watch for the external review’s findings and the bank’s strategy to address the issue.