IndusInd Bank reported a notable 22% rise in Q3 net profit to INR 2,202 crore ($296 million), driven by an 18% increase in core net interest income and a significant drop in provisions to INR 973.81 crore ($131 million). The bank also disclosed an improved gross non-performing assets ratio of 1.93%.
In other financial news, IndusInd International Holdings (IIHL), the successful bidder for Reliance Capital (RCap), is facing legal scrutiny over its resolution plan. The plan involves raising funds by charging RCap's most valuable holdings, including shares in Reliance General Insurance (RGIC). However, Khaitan & Co, a legal firm hired by RGIC, has provided an opinion that IIHL cannot extinguish employee stock option plans (ESOPs) and other incentive schemes for RGIC employees.
This legal opinion is grounded on the principle of 'separate legal entity', which states that a parent company's resolution plan cannot dictate the treatment of a subsidiary's assets and liabilities. The law firm cited several Supreme Court and National Company Law Tribunal (NCLT) judgments to support their stance.
In related news, the Finance Ministry is considering a fourth quarter capital infusion into three public sector general insurance companies currently experiencing losses. This follows an earlier infusion of INR 17,450 crore ($2.35 billion) and plans to privatize one of these companies. The decision will be based on each company's performance and solvency ratio requirement.
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