In the last 25 years, only a few cases have come to light when the Reserve Bank of India (RBI) issued public statements on commercial banks and assured about their financial situation and asked the depositors not to react to the news of not getting into chaos and speculation.
The Reserve Bank has appealed for the latest IndusInd Bank. The bank’s capital suffered 2.35 percent loss due to accounting error, an estimated Rs 1,500 to 2,000 crore rupees. Due to this, the bank’s shares fell more than 27 percent last Wednesday.
On Saturday, the Reserve Bank issued a statement appealing to the depositors that there is no need to react to the speculation report at this time. At the same time, the Reserve Bank also confirmed IndusInd’s better financial health. It also said that the regulator is monitoring this bank closely.
Saturday’s statement also stated that the Reserve Bank has directed the Board and Management of IndusInd to complete the remedial action in the fourth quarter of FY 2025 after giving necessary information to all the shareholders.
The Reserve Bank has also cited IndusInd Bank’s strong capital adequacy ratio (16.46 percent), provision coverage ratio (70.2 percent) and liquidity coverage ratio (113 percent).
Its liquidity coverage ratio was 118 percent at the end of December. This is far above 100 percent regulatory requirement. Earlier on April 12, 2003, there was chaos among the customers over ICICI Bank and the regulator issued a press release to clear the status of adequate cash with ICICI Bank.
On March 5, 2020, the Reserve Bank assured the depositors in the case of Yes Bank that their interests would be protected. One of the reasons for the Reserve Bank to make this statement sometimes to calm the depositors is that the Reserve Bank as a banker for banks also acts as ‘Lander of the Last Resort’ (LOLR). In the case of IndusInd, the Reserve Bank has to appear in the role of LOLR.
First Published – March 16, 2025 | 10:26 PM IST