IndusInd Bank CD Fundraising of ₹16,550 Crore
Why in the news
IndusInd Bank tapped the money market heavily in March 2025, soon after admitting to mismatches in its derivatives book and facing deposit outflows.
Key facts
- Raised ₹16,550 crore via Certificates of Deposit (CDs) in March.
- On 10 March: 12-month CDs worth ₹1,890 crore at 7.75%; derivatives issues would cut net worth by 2.35%.
- Next week: ₹11,000 crore at 7.8%-7.9%, about 15 bps higher.
Why CDs found takers
- Yields beat public-sector bank CDs (roughly 7.5%-7.6%), so buyers earned a favourable spread over their funding cost.
- Mostly state-run banks bought, undeterred because returns were higher.
Response and concerns
- An external agency checked the loss estimate; an independent firm was later hired for a comprehensive investigation.
- The probe will shape long-run reputation and financial stability.
Exam angle
- Instrument: Certificate of Deposit, a money-market borrowing tool.
- Recall: 7.75% coupon, 2.35% net-worth hit, 15 bps rise.