IndusInd Bank Shifts ₹10,000 Crore Loans to ICICI, Federal Bank Under IBPC.

Banking & Finance

In March 2025, Mumbai (Maharashtra)-based IndusInd Bank Limited recently transferred corporate loans worth over ₹10,000 crore to ICICI Bank Limited (Mumbai-based) and Federal Bank Limited (Kochi, Kerala-based) through Inter-Bank Participation Certificates (IBPC) to bolster liquidity amid concerns over potential deposit outflows linked to an ongoing accounting probe.


      - The IBPC is a money market instrument used by banks to share loans and meet year-end lending targets.

      - In these transactions, the selling bank receives 40% of the loan amount, which helps in managing liquidity and retiring deposits.

     

Main Point :-   (i) Loans were transferred via the IBPC market, a short-term instrument (typically 6 months) allowing banks to borrow/lend against loan collateral.

      (ii) Acquired loans carry an interest rate of 7.5-8%.

(iii) IndusInd Bank aims to secure liquidity to offset risks from a ₹2,000 crore net worth erosion linked to accounting irregularities.

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