IndusInd Bank shares climb 5% as RBI says accounting issues to be resolved soon

Shares of IndusInd Bank Ltd surged 5.32 per cent in Friday's session, reaching a high of Rs 845.85, after the Reserve Bank of India (RBI) indicated that the ongoing accounting issues would be resolved "very soon." Speaking to the media following the Monetary Policy Committee's (MPC) rate cut announcement, RBI Governor Sanjay Malhotra said that the central bank is closely monitoring the matter and expects a resolution in the near term.

"The IndusInd Bank issue should settle very soon. We will keep monitoring it. The bank has taken enough steps to improve the accounting issues and, on the whole, it is doing well," Malhotra stated.

The crisis-hit private lender recorded a consolidated net loss of Rs 2,328.92 crore in the January-March 2025 quarter as against a profit of Rs 2,349.08 crore in the corresponding period last fiscal. The stock rose 1.82 per cent at Rs 785.10. At this price, it has corrected 19 per cent on a year-to-date (YTD) basis.

Net interest income (NII) stood at Rs 3,048.3 crore for the March 2025 quarter and provisions soared to Rs 2,522.08 crore in Q4 FY25. Sequentially, the lender's gross non-performing asset (NPA) rose to 3.13 per cent in Q4 FY25 from 2.25 per cent in the December 2024 quarter.

IndusInd, in its first earnings report after uncovering accounting discrepancies, disclosed a potential internal fraud involving Rs 172.58 crore which had been incorrectly recorded as fee income during FY25.

In addition, the bank noted that a cumulative amount of Rs 670 crore in the microfinance business had been wrongly recorded as interest income during the first nine months of FY25 and was fully reversed as of January 10, 2025. The bank also reported unsubstantiated balances, totalling Rs 595 crore, in its 'other assets' accounts, which were offset against corresponding balances in 'other liabilities' accounts.

Some market experts have advised caution regarding the private lender at this time. Market specialist Arun Kejriwal advised investors to avoid the stock at current levels and instead explore more promising opportunities. Similarly, Deven Choksey, MD of DRChoksey FinServ Pvt, also recommended staying away from the counter for now.