RBI Slaps ₹27.3 Lakh Penalty on IndusInd Bank for Regulatory Violations

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹27.3 lakh on IndusInd Bank Ltd for failing to comply with regulatory norms. The penalty, announced through an order dated December 18, 2024, was imposed for violations of the Reserve Bank of India (Interest Rate on Deposits) Directions, 2016.

On December 23, 2024, IndusInd Bank share price gained 0.50% at ₹935.65 on BSE at 9:24 AM (IST). As per BSE data, the stock recorded a total traded volume of 7705 shares, amounting to a turnover of ₹72.09 Lakhs. At the current price, IndusInd Bank’s shares are trading at a price-to-earnings (P/E) ratio of 8.92x, based on trailing 12-month EPS of ₹104.87, and a price-to-book (P/B) ratio of 1.11.

Violation Details By IndusInd Bank 

The RBI conducted a statutory inspection of IndusInd Bank based on its financial position as of March 31, 2023. During this process, the central bank uncovered that IndusInd Bank had opened savings accounts for entities that were not eligible to do so under the applicable norms.

Subsequently, the RBI issued a notice to IndusInd Bank, asking it to explain why punitive action should not be taken for failing to adhere to the prescribed guidelines. After reviewing the bank’s written and oral submissions during a personal hearing, the RBI concluded that the violation was substantiated, necessitating the imposition of the penalty.

Penalty and Compliance Focus

In its statement, the RBI clarified that the penalty pertains solely to regulatory non-compliance and does not impact the validity of any bank transactions or agreements with its customers.

“RBI found, inter alia, that the charge pertaining to the opening of certain savings deposit accounts in the name of ineligible entities was sustained, warranting the imposition of monetary penalty,” the central bank said.

IndusInd Bank’s Q2 FY25 Performance

The profit stood at ₹1,331.29 crore, compared to ₹2,202.16 crore in the corresponding quarter of the previous year. The bank’s net interest income (NII) rose to ₹5,347 crore.

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