Bank Flags ₹1,979 Cr Derivatives Impact After PwC Review

IndusInd Bank confirmed on April 15 that PwC, the external agency appointed for an independent assessment, identified discrepancies in its derivatives portfolio. The estimated negative impact is pegged at ₹1,979 crore as of June 30, 2024, to be reflected in FY25 financial statements.

Impact on Financial Health

• The adverse post-tax impact is 2.27% on net worth as of December 2024.
• The bank’s Q3FY25 net worth stood at ₹65,102 crore, implying a material financial dent.
• Despite the hit, the bank reaffirmed it will report net profit for Q4 and FY25, as per CEO Sumant Kathpalia.

Timeline of Events

• March 10, 2025: Bank’s internal review flagged an initial estimated hit of ₹1,530 crore (~2.35% of net worth).
• PwC was engaged to validate and refine the impact assessment.
• The bank has also appointed an independent firm to investigate the root cause of the discrepancies.

RBI’s Position and Market Measures

• The Reserve Bank of India (RBI) assured depositors of the bank’s financial stability and urged calm amid speculative reports.
• In response to liquidity concerns, IndusInd Bank raised ₹16,550 crore in Certificates of Deposit (CDs) at 7.75–7.9% interest in March — five times higher than its usual CD market activity.

Deposit and Advances Trends (Q4FY25)

• Retail and small business deposits fell by ₹3,550 crore, from ₹1.88 trillion to ₹1.85 trillion.
• Total deposits rose marginally by 0.4% QoQ, reaching ₹4.11 trillion — a 6.8% YoY increase.
• Overall advances shrank by ₹19,000 crore from the December quarter.

BS