The stock market has been experiencing high volatility this week, with both the Sensex and Nifty witnessing a sharp decline of 0.62% and 0.25%, respectively. Among the biggest losers, IndusInd Bank shares have hit the lower circuit, sending shockwaves through investors. This marks the biggest crash in IndusInd Bank shares since March 2020, leaving investors questioning what lies ahead for the private lender.

Amid the sharp decline in IndusInd Bank’s stock, a major concern has emerged: Are customer deposits safe? Many account holders are now questioning whether this major drop in IndusInd Bank shares downfall could impact their funds. Let’s break it down.

Why Did IndusInd Bank Shares Crash?

IndusInd Bank shares plummeted by almost 30% in this trading week, which led to panic among the investors. This sharp decline has raised concerns about the bank’s financial health and future stability. The blow came after the bank disclosed discrepancies in its derivatives accounting, a revelation that sent shockwaves through investors and analysts alike.

As per reports, an internal review found that IndusInd Bank had significantly underestimated its hedging costs linked to past forex transactions. This miscalculation is expected to impact the bank’s net worth by Rs. 1,600-2,000 crore, which is equivalent to 2.35% of its net worth as of December 2024 as per ET.

Adding to the uncertainty, the Reserve Bank of India (RBI) recently approved only a one-year extension for the bank’s Managing Director and CEO, Sumant Kathpalia, despite the board’s request for a three-year term renewal. This is the second consecutive time the RBI has granted him a shorter tenure.

IndusInd Bank Share Price Movement

The IndusInd Bank stock performance has been heavily impacted by these latest developments. IndusInd Bank’s share price has already lost 55.24% over the past six months and has fallen 30.62% so far this year.
On March 13, 2025, the stock closed at Rs. 672.55, slipping 1.77% during the trading session, with its market capitalization standing at Rs. 52,990 crore.

Several leading brokerage firms have responded to the crisis by sharply revising their ratings and target prices for the stock. ICICI Securities has downgraded the stock to “REDUCE” from “BUY,” lowering its target price from ₹1,350 to ₹850.

Similarly, Kotak Securities has also downgraded the stock with a revised fair value of ₹850, down from ₹1,400.

Motilal Oswal has taken a more cautious stance, downgrading IndusInd Bank to a “NEUTRAL” rating with a revised target price of ₹925.

Should IndusInd Bank Customers Be Worried?

With the sharp decline in IndusInd stock price, many IndusInd Bank customers are questioning the safety of their deposits, savings accounts, and fixed deposits. However, it’s important to note that your deposits are safe as IndusInd Bank is a regulated entity under the Reserve Bank of India (RBI) and follows strict banking norms. Deposits up to Rs. 5 lakh per depositor are insured under DICGC (Deposit Insurance and Credit Guarantee Corporation). Despite the share price drop, IndusInd Bank continues to operate normally, processing transactions and withdrawals without any restrictions.