RBI flags ₹3823 Cr provision issue, ₹2470 Cr Tier 2 capital miscalculation for Indian Bank
Indian Bank has disclosed observations from a recent RBI inspection (ISE 2026). The RBI noted that ₹3823 Crore of specific provisions for stressed standard assets were incorrectly included in General Provisions and Loss Reserves (GPLR). Additionally, ₹2470 Crore was incorrectly reckoned as part of the Bank's Tier 2 Capital. The RBI also observed an underestimation of Credit Risk Weighted Assets (RWA) by ₹22,079 Crore due to the non-application of Credit Conversion Factor (CCF) to undrawn exposures with unconditional cancellability clauses. While these adjustments led to a revised Total CRAR of 16.53% from the bank's calculated 17.93%, the RBI assessed that these changes do not impact the Net Profit as of March 31, 2026. The bank's CRAR remains well above regulatory minimums, and these aspects have been factored into subsequent calculations.
Key Highlights
- RBI identified ₹3823 Cr provision misclassification and ₹2470 Cr Tier 2 capital error.
- Credit RWA underestimated by ₹22,079 Cr due to CCF application on undrawn exposures.
- Total CRAR revised to 16.53% from 17.93% based on RBI assessment.
- No impact on Net Profit as of March 31, 2026 reported.
- Capital Adequacy Ratios remain above RBI minimum requirements.
Price Impact
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