Mon Mar 17 04:00:00 UTC 2025: ## IndusInd Bank Shares Surge After RBI Reassurance, Despite Accounting Error and Downgrades

**Mumbai, March 17, 2025** – IndusInd Bank’s share price rebounded sharply today, climbing 5% to ₹707 on the BSE after the Reserve Bank of India (RBI) issued a statement reassuring depositors about the bank’s financial stability. The surge follows a tumultuous week for the bank, which saw its stock price plummet 32% between March 6th and 11th due to an accounting error estimated to cause a ₹1,500-2,000 crore loss.

The RBI’s intervention, which included confirming that IndusInd Bank is well-capitalized and directing the bank’s board to take remedial action, helped stem the sell-off. The bank’s Q3FY25 results showed a comfortable Capital Adequacy Ratio (CAR) of 16.46%, a Provision Coverage Ratio (PCR) of 70.20%, and a Liquidity Coverage Ratio (LCR) of 113% as of March 9th. Despite the positive news, analysts remain cautious.

ICICI Securities and Mirae Asset Sharekhan both downgraded the stock from “Buy” to “Hold,” citing concerns about the accounting error, management changes – including the shorter-than-expected extension of the CEO’s term and the CFO’s resignation – and potential further losses. They also highlighted repeated risk management lapses and uncertainties surrounding the bank’s business model. While acknowledging the bank’s seemingly cheap valuation, analysts pointed to uncertainties surrounding management stability and potential regulatory intervention as hurdles to a stronger investment case.

IndusInd Bank, the fifth-largest private bank in India, is undergoing an external audit to assess the full impact of the accounting error. The RBI’s statement may also have invoked its role as Lender of Last Resort (LOLR), although this wasn’t explicitly stated. The bank’s inclusion in global indices could also offer some support, despite the potential for removal from the Sensex and Nifty. Despite today’s gains, investor sentiment is expected to remain subdued until the accounting issues are fully resolved.

**Disclaimer:** This article is for informational purposes only and does not constitute investment advice.

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