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Informist, Wednesday, Mar. 19, 2025

 

By Siddhi Chauhan, Vidhushi Rajpurohit, and Kabir Sharma

 

--IndusInd Bank raises INR 15.00 billion via CDs at 7.90% on Wed 

--Sources: IndusInd Bank plans to issue more CDs on Wed 

 

MUMBAI – IndusInd Bank raised INR 15.00 billion via certificates of deposit on Wednesday, data from the Clearing Corp. of India's F-TRAC platform showed. The bank raised INR 10.00 billion through a paper maturing in November and INR 5.00 billion through a paper maturing in October. The private sector bank, which recently disclosed certain accounting discrepancies in its derivatives book, raised the funds at 7.90?ch, a spread of 15 basis points over the prevailing market rates.

 

The bank is likely to issue more CDs during the day, sources aware of the matter told Informist.

 

"After RBI's (Reserve Bank of India's) statement, the market is thinking that everything is fine with IndusInd Bank," a dealer at a state-owned bank said. "So if we look in that context, 7.90% is a good level for the market as the issuer is also getting a good enough spread."

 

Market players said the level was not too high given the current turmoil. The RBI on Saturday released a statement that the private lender is "well-capitalised and the financial position of the bank remains satisfactory". "As such, there is no need for depositors to react to the speculative reports at this juncture," the RBI had said.

 

According to Cogencis India Certificates of Deposit Benchmark yields, the rates in the market for eight-month papers and nine-month papers are at 7.68%. IndusInd Bank had raised INR 110 billion through certificates of deposit on Monday. Earlier this month the bank raised INR 18.50 billion via one-year CDs at a rate of 7.75%. 

 

"There's not any difference in the rates in comparison to what they raised earlier. In comparison to the market also the rates are not that high," a dealer at another state-owned bank said. "It will be difficult to say whether or not they'll continue the issuances but year-end funding needs usually require banks to increase their borrowing so that could be a factor."

 

IndusInd bank has been in the headlines since last week after it reported discrepancies in its derivatives portfolio that could have an adverse impact of around 2.35% on the bank's networth as of December end, or about INR 15 billion. The reports on discrepancies in IndusInd Bank should be out by next week, Ashok P. Hinduja, chairman of IndusInd International Holdings Ltd., said Tuesday.  

 

On Wednesday, shares of the bank ended 1.7% higher at INR 692.70 on the National Stock Exchange.  End

 

Edited by Saji George Titus

 

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