IndusInd Bank has been imposed a monetary penalty of ₹1 crore by the Insurance Regulatory and Development Authority of India (IRDAI). The regulator cited non-compliance with provisions related to grievance redressal and reporting mechanisms for insurance policyholders.

The penalty order, dated September 10, 2026, stems from audit observations regarding the bank's bancassurance operations. IndusInd Bank acts as a Corporate Agent for distributing third-party insurance products. The IRDAI identified specific failures in the mechanisms provided to policyholders for complaint reporting.

Inspection Timeline

The regulatory action follows a multi-year process initiated by an onsite inspection. Key dates in the enforcement timeline include:

• June 19 to June 22, 2023: IRDAI conducted an onsite inspection of the bank's bancassurance operations.
• July 21, 2023: The regulator issued its Inspection Report based on the findings.
• March 26, 2025: IRDAI issued a Show Cause Notice initiating enforcement proceedings.
• September 10, 2026: After considering written submissions and conducting a personal hearing, the IRDAI passed the final penalty order.

Nature of Violations

The IRDAI's observations highlighted several operational gaps during the June 2023 inspection. The violations included:

• Failure to issue renewal notices to policyholders as required.
• Lack of adequate grievance redressal facilities via the bank's website for policyholders.
• Non-display of the IRDAI Registration Number on the bank's website.
• Inadequate disclosure on the website clarifying that IndusInd Bank acts only as a Corporate Agent and does not underwrite insurance risk itself.

What the Numbers Show

The financial impact of this regulatory action is limited to the ₹1 crore penalty. This amount represents a direct compliance cost rather than an operational loss from core banking activities. The delay between the initial inspection in mid-2023 and the final order in late 2026 indicates a protracted enforcement cycle, allowing the bank time to address procedural gaps before the monetary penalty was finalized.

IndusInd Bank has launched an overdraft and cash credit linked corporate credit card for businesses, aimed at enabling seamless spending, tighter control, and smarter utilisation of working capital. The launch was announced on September 11, 2026.

Product overview

The new corporate credit card is directly linked to existing overdraft and cash credit facilities, allowing businesses to draw on their sanctioned working capital limits through a card-based interface. This integration is designed to streamline how companies access and deploy their working capital in day-to-day operations.

This revolutionary proposition enables the card to operate directly on the customer's existing OD or CC account, eliminating the need for separate credit limits, billing cycles, or standalone reconciliation. By integrating day-to-day business spends with core working capital lines, the solution enables businesses to manage liquidity more efficiently while ensuring complete transparency and control over expenses.

Key features and benefits

The product addresses three core business needs:

• Seamless spending: Businesses can make payments directly against their overdraft or cash credit limits without requiring separate fund transfers.
• Tighter control: The card format provides businesses with enhanced visibility and oversight over expenditure drawn from working capital lines.
• Smarter utilisation: Linking card transactions to existing credit facilities allows companies to optimise the deployment of their sanctioned limits.

Additional features include:

• Direct linkage to OD/CC account: Enabling real-time utilization of sanctioned limits.
• No separate credit limit or billing cycle: Simplifying cash flow tracking.
• Strong transaction controls: Enabling card holders to set or modify daily transaction limits anytime.
• Centralized expense management: Aiding better control and transparency.
• Operational efficiency: Reducing manual processes and reconciliation efforts.
• Flexible usage: For routine business expenses, vendor payments, and operational spends.

What this means for corporate customers

The launch represents an expansion of IndusInd Bank's corporate banking product suite, targeting businesses that already maintain overdraft or cash credit relationships with the bank. By combining the flexibility of a credit card with the structure of working capital financing, the product seeks to reduce friction in corporate payment workflows.

Commenting on the launch, Jagdeep Mallareddy, Executive Director IndusInd Bank, said: "Businesses today, are looking for smarter, more integrated financial solutions that simplify operations, while offering greater control over cash flows. IndusInd Bank's OD/CC linked Corporate Credit Card addresses this need by seamlessly extending the utility of sanctioned working capital limits into payments, driving higher operational efficiency for businesses. This launch reflects the Bank's continued focus on leveraging digital capabilities to deliver innovative solutions that empower businesses and MSMEs to scale with confidence."

The OD/CC-linked Corporate Credit Card enables seamless online and offline payments by drawing directly from sanctioned OD or CC limits. The card will be launched on major card networks in India, including NPCI – RuPay, Mastercard, and Visa. The product platform will be powered by PropelGo Technologies.