IndusInd Bank has signaled a definitive turning point for its microfinance portfolio, declaring that the acute turbulence that plagued the segment over the past year is firmly in the rearview mirror.
Speaking in an interview, Managing Director and CEO Rajiv Anand expressed strong optimism for a rebound starting in the second quarter. The sector-wide and bank-specific stress followed a challenging period for the lender, which included governance and accounting hurdles in 2025 centered around its microfinance subsidiary, Bharat Financial Inclusion Ltd (BFIL). That turbulence forced the bank to reverse ₹674 crore of cumulative interest income and disclose a ₹172 crore fraud involving employee-falsified fee income.
Having navigated those headwinds, Anand noted that risk metrics are stabilizing favorably. The bank has successfully scaled up disbursements once again, laying the operational groundwork for renewed momentum. Looking ahead to the entirety of fiscal year 2027, IndusInd Bank is projecting a healthy 15% to 20% growth rate within its microfinance and rural banking vertical, fueled in part by the strong performance of specialized offerings like “Bharat Superstore,” which extends credit to kirana stores and small-scale food businesses.
On the broader financial front, Anand stated that overall asset growth for the bank will move in tandem with broader market trends, anticipated to hover around 17% to 18%. Addressing impending regulatory shifts, he noted that the transition to Expected Credit Loss (ECL) guidelines—slated to come into force on April 1, 2027—is projected to require roughly 1% to 1.5% of assets. With a robust Common Equity Tier 1 (CET1) ratio standing at 16.1% as of June 2026, Anand assured that the bank’s net worth is more than adequate to absorb the transition.
The positive outlook follows a solid start to the fiscal year for IndusInd Bank, which posted a 72% jump in consolidated profit after tax to reach ₹1,037.05 crore for the quarter ended June 30, 2026.
