Karan Gupta, Director & Head – Financial Institutions, at India Ratings & Research believes that the RBI might now conduct a broader review of banks’ derivative dealings to check for more such issues.
And now that the Reserve Bank of India (RBI) is reviewing the matter, other banks could also discover similar issues in their own records. An RBI circular in 2024 had already pointed out gaps in how banks manage their transfer pricing, so more such cases may come up, said Diwanji.
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However, India lacks enough experienced professionals to thoroughly investigate such complex transactions, which could make the process difficult.
One of the major concerns is why IndusInd Bank took several months to disclose the issue, even though it was aware of it earlier. The bank may have wanted to fully understand the problem before informing investors.
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The problem itself is linked to how the bank’s internal and external desks recorded the same transactions differently. Because of this, a loss of ₹2,000 crore remained unreported until the transactions were settled. This kind of issue can happen when banks use different accounting methods for internal reports versus external financial statements.
Despite this, experts do not believe the banking sector is in danger. Most banks are financially stable, and there is no major problem with capital or asset quality, said Gupta.
Also Read | Ashok Hinduja on IndusInd Bank’s stability, transparency concerns, and promoter support
However, banks will have to improve their risk management, especially with changing exchange rates and interest rates.
Banking in India is still expected to grow steadily. Loan growth is projected to rise by 13.5% in the financial year 2026, and deposits are also expected to increase by 12.5%. However, non-banking financial companies (NBFCs) could face more difficulties, as their unsecured loans may become riskier.
The current market capitalisation of IndusInd Bank stands at ₹52,426.47 crore and has seen its shares lose more than 55% over the last year.
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