IndusInd Bank Share Price Rise Over 3% Amid Loan Transfers and Accounting Concerns

IndusInd Bank share price is trading at ₹674.00, up by ₹24.15 (3.72%) as of 12:10 PM IST on April 1, as reports emerged about the bank’s recent loan transactions. The bank has transferred high-rated corporate loans to private banks like Federal Bank and ICICI Bank to strengthen its liquidity position. These loans were acquired at an interest rate of 7.5-8% through the Inter-Bank Participation Certificate (IBPC) market, as per sources.

Accounting Issues Raise Governance Concerns

Despite the stock’s gain, investors remain cautious due to ongoing concerns over accounting lapses that may have reduced IndusInd Bank’s net worth by ₹2,100 crore. 

RBI has instructed IndusInd Bank to fully implement remedial actions by March 31, 2025 (Q4FY25). Investors are also awaiting the PwC (PricewaterhouseCoopers) report, which is expected to reveal the actual losses incurred due to these discrepancies.

Potential Risks and Impact on Deposits

Market analysts fear that governance concerns may lead to a loss of investor confidence and a potential withdrawal of deposits. If the external audit uncovers further discrepancies, the bank may have to increase provisions, restate financials, and undergo further regulatory scrutiny.

Microfinance Portfolio Under Pressure

IndusInd Bank’s microfinance portfolio is also facing challenges. Credit slippages have pushed the 30-90 days past due (DPD) bucket to 4%, leading to higher credit costs. The situation is particularly concerning in Karnataka, where collection efficiency has weakened due to regulatory changes.

The Karnataka ordinance, implemented in February 2025, could result in lower collections and increased defaults. However, the bank has limited exposure in affected districts, as Karnataka accounts for only 13% of its microfinance portfolio.

CEO Transition and Future Strategy

The RBI’s decision to extend CEO Sumant Kathpalia’s term by only 1 year has also drawn attention. While the bank will continue operations as usual, investors are keen to see how the new CEO, once appointed, will address governance concerns and revive growth.

About IndusInd Bank Limited

IndusInd Bank Limited, established in 1994, is a public-sector commercial bank operating under the Banking Regulation Act of 1949. It offers a broad range of banking products and financial services to corporate and retail clients and treasury operations. The bank operates across India, including in International Financial Service Centres.

Conclusion

IndusInd Bank is navigating a challenging phase, balancing liquidity management through loan transfers while addressing governance issues. Investors remain cautious, awaiting regulatory updates and the PwC report’s findings, which will likely determine the bank’s next course of action.

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