IndusInd Bank has disclosed a regulatory penalty imposed by the Reserve Bank of India, highlighting compliance challenges in its currency chest operations. The bank made the disclosure under Regulation 30 of SEBI Listing Regulations on January 28, 2026.

Penalty Details

The Reserve Bank of India has imposed a penalty of Rs. 2,03,000/- on IndusInd Bank's Currency Chest located in Chennai. The penalty relates to discrepancies found in Soiled Note Remittance (SNR) operations during regulatory examination.

Regulatory Framework

The penalty has been levied under the Master Direction DCM (CC) No. G-1/03.44.01/2025-26 dated April 01, 2025. This master direction establishes the scheme of penalties for bank branches and currency chests, specifically targeting operational discrepancies in currency management.

The regulatory action was taken under para 2.i, ii & iii of the aforementioned master direction, which governs penalty provisions for currency chest operations.

Financial Impact

The bank has quantified the monetary impact of this regulatory action at Rs. 2,03,000/-, representing the direct penalty amount. This penalty stems from discrepancies detected during the examination of soiled notes received in remittance operations.

Compliance Disclosure

IndusInd Bank has fulfilled its disclosure obligations by informing the National Stock Exchange of India, BSE Ltd., and Luxembourg Stock Exchange about the regulatory penalty. The bank has also uploaded this information on its official website at www.indusind.bank.in as part of its transparency commitments.

The disclosure was signed by Anand Kumar Das, Company Secretary, ensuring proper authorization and compliance with regulatory requirements.

IndusInd Bank is banking on its commercial vehicle and microfinance portfolios to drive recovery as the lender navigates past accounting challenges and leadership changes. Managing Director and CEO Rajiv Anand outlined the bank's strategic focus during the post-December quarter earnings call, expressing confidence in the new leadership team's ability to restore growth momentum.

Loan Portfolio Performance

The bank's loan book performance during the December quarter showed mixed results across different segments:

"We are seeing that incremental disbursals on our microfinance book are behaving much better than what we have seen in the very recent past," Anand said. The CEO expressed optimism that both growth and slippages in the microfinance business will improve significantly from current levels.

Strategic Focus Areas

The bank is concentrating on several key areas to drive future growth:

• Commercial Vehicle Finance: Continues to be a steady performer with 5% year-on-year growth
• Microfinance Recovery: Incremental disbursements showing better repayment behavior
• MSME Segment: Expected to strengthen and support fee income growth
• Retail Liability Franchise: Focus on granular deposits over bulk deposits

Anand highlighted that disbursements remained robust in vehicle finance, retail, and granular corporate lending despite the overall decline in average advances.

Deposit and Liability Strategy

On the liability side, deposits fell 4% year-on-year and 1% quarterly to ₹3.93 trillion. The bank is implementing a strategic shift toward retail deposits:

"Our intent is to grow in line with the market on both assets and liabilities in 2026-27, and as we think about granulizing our liabilities, the intent is to grow our liability franchise faster than our bulk deposits," Anand explained. This strategy aims to reduce funding costs and build a less volatile asset base.

Financial Targets and Capital Position

The bank has set ambitious targets for the coming period:

• Return on Assets: 1% on exit basis over next 12-18 months
• Growth Alignment: Match system-level growth in 2026-27
• Capital Adequacy: Remains comfortable for near-term growth

Management is investing significant resources in strengthening the retail liability business through organizational changes, process improvements, and enhanced branch-level productivity.

Regulatory Matters

Addressing regulatory concerns, Anand clarified that the Serious Fraud Investigation Office probe focuses on certain past and present officials rather than the bank itself. Additionally, an audit qualification at subsidiary Bharat Financial Inclusion relates to legacy issues, with financial impacts already provided for in previous years.