IndusInd Bank Shares Surge 5% After RBI’s Reassurance on Financial Stability

On Monday, March 17, 2025, IndusInd Bank’s share price surged by 5%, reaching ₹707 on the BSE during intra-day trading. The rally came after the Reserve Bank of India (RBI) reassured depositors about the bank’s financial stability, following a sharp decline in its stock price due to concerns over an accounting error.

Stock Price Volatility and RBI’s Intervention

IndusInd Bank’s stock had experienced significant turbulence in recent days. Between March 6 and March 11, the share price plummeted by 32%, driven by an accounting error that resulted in an estimated loss of ₹1,500-2,000 crore—approximately 2.35% of the bank’s capital. The worst hit came on March 12, when the stock plunged over 27%, creating panic among investors and depositors.

To restore confidence, the RBI issued a statement urging depositors to remain calm, clarifying that the bank remained stable. The central bank also instructed IndusInd Bank’s board to complete remedial measures within Q4FY25 (January to March 2025). Following this intervention, the stock price rebounded, gaining 17% from its low of ₹605 recorded on March 12.

RBI’s Assessment of IndusInd Bank’s Financial Health

In its official statement, the RBI reaffirmed IndusInd Bank’s financial strength, stating that the bank remains well-capitalised and fundamentally sound. The central bank acknowledged that an external audit team had been engaged to assess and correct the impact of the accounting error as swiftly as possible.

As per the auditor-reviewed financial results for Q3FY25 (December 31, 2024):

• Capital Adequacy Ratio (CAR) stood at 16.46%, indicating a solid capital buffer.

• Provision Coverage Ratio (PCR) was 70.20%, reflecting the bank’s preparedness to cover bad loans.

• Liquidity Coverage Ratio (LCR) was 113% as of March 9, 2025, well above the regulatory requirement of 100%, ensuring sufficient liquidity to meet obligations.

Investor Sentiment and Market Outlook

The RBI’s proactive response played a crucial role in stabilizing market sentiment around IndusInd Bank. Analysts believe that as long as the bank successfully implements corrective measures and maintains regulatory compliance, investor confidence will continue to recover.

With the stock rebounding steadily and the RBI’s assurance of oversight, IndusInd Bank appears poised to regain its market footing in the coming weeks. However, investors remain watchful for further developments as the bank completes its financial review and corrective actions.