India Ratings Keeps IndusInd Bank’s Outlook Negative After Accounting Lapses

India Ratings has affirmed IndusInd Bank’s long-term issuer rating at ‘AA+’ but maintained a negative outlook, citing concerns over ₹49.2 billion worth of accounting discrepancies reported in 2024-25. The rating has also been removed from “Rating Watch with Negative Implications,” the agency said in an exchange filing Friday.

The same ratings action was applied to the bank’s ₹15 billion senior unsecured redeemable bonds and ₹40 billion Basel-III compliant tier-II bonds.

The negative outlook reflects risks tied to weak internal controls and the uncertainty surrounding leadership transition after CEO Sumant Kathpalia's resignation. India Ratings expects strategic shifts, potential pressure on profitability, and reduced return on assets to about 1% in 2025-26. That compares with 1.8% in the previous two years.

Still, the agency acknowledged the lender’s strong position in core products, adequate capital buffer, and limited asset quality stress.