MC EXCLUSIVE IndusInd Bank taps CD market after two months, gets 50 bps higher rate than peers

IndusInd Bank

Private lender IndusInd Bank has tapped the certificates of deposit (CD) market nearly two months after nearly two months, raising Rs 1,500 crore amid ongoing uncertainty following lapses in its derivatives portfolio and the resignations of its CEO and deputy CEO.

According to the Clearing Corporation of India (CCIL) data, IndusInd Bank raised Rs 1,500 crore on May 21 through CDs maturing in three months or on August 25, 2025, at a 6.90 percent yield. This was the first issuance by the bank after they raised funds on March 20.

IndusInd Bank stayed absent from the primary market after mobilising heavy funds in March. The lender had ramped up efforts to mobilise certificates of deposit in March to raise more than Rs 16,500 crore through CDs.

The funds were raised nearly 40-50 basis points (Bps) higher than its peers. Other banks issuing similar maturity papers were getting a yield between 6.40 percent and 6.50 percent.

Money market experts said that uncertainty over the bank still persists, leading to higher yields for the CDs.

On May 8, Moneycontrol reported that the yield on the certificates of deposit of the lender surged 10-15 basis points since the start of the fiscal year in the secondary market. This came even as the traded volumes were sharply lower than other major private and state-owned banks.

Uncertainty around IndusInd Bank began in March when the lender reported an accounting discrepancy linked to its derivatives portfolio. Subsequent reviews by an external agency and a Board-appointed independent professional firm estimated the adverse accounting impact at Rs 1,979 crore and Rs 1,959.98 crore, respectively.

The fallout led to the resignation of CEO and MD Sumant Kathpalia on April 29, followed by Deputy CEO Arun Khurana stepping down the next day.

The private lender posted a net loss of Rs 2,328.92 crore for the fourth quarter of the financial year 2024–25. This marked its first earnings report since the bank unearthed major accounting discrepancies, which triggered regulatory scrutiny, top-level resignations, and multiple audits.

The bank’s board of directors, in a post-earnings call with analysts, said it suspects a case of fraud involving certain employees who played a key role in financial reporting and accounting. The board has initiated all actions required under applicable laws, including reporting the matter to regulatory and investigative authorities.

The internal audit committee, citing investigation findings, indicated likely involvement of former Key Managerial Personnel (KMP) and other senior officials. “On the basis of revaluation of the findings, there is likely involvement of senior bank officials including former KMP in overriding internal control across functions and concealment from the board and statutory auditors of the wrongful accounting practices adopted over such period of time, as indicated in the respective investigation and review reports,” the committee stated.