Shares of RBL Bank fell by as much as 2.94% to ₹150.60 on the National Stock Exchange (NSE) on Tuesday, 4 March, after the lender confirmed that GST authorities had conducted a search at three of its offices in Maharashtra. The search began on 3 March 2025, and the proceedings are ongoing. RBL Bank stated that it is fully cooperating with authorities and providing the requested data.
At 9:45 AM, the stock was trading 1% lower at ₹153.65 on the NSE.
GST Search at RBL Bank Offices
The bank did not disclose specific details regarding the nature of the investigation but confirmed that officials from the GST department visited its premises. “We are extending full cooperation to the authorities and providing data as per their request,” RBL Bank said in a regulatory filing. The impact of the search on the bank’s financials remains unclear at this stage.
Profit Decline in Q3 FY25
For the quarter ended 31 December 2025 (Q3 FY25), RBL Bank reported a sharp decline in net profit, which fell to ₹47 crore from ₹245 crore in the same period last year. The decline was primarily due to stress in the bank’s microfinance loan portfolio.
The bank’s net profit had stood at ₹231 crore in the previous quarter, indicating a significant drop in earnings within three months. RBL Bank has been dealing with high credit costs in recent quarters, adding to financial pressure.
Key Financial Metrics
Despite the decline in profit, the bank’s core net interest income (NII) increased by 3% to ₹1,585 crore. Other income, which includes earnings from non-core activities, surged 38% to ₹1,073 crore, supported by a stake sale in the non-banking financial company (NBFC) DAM Capital.
The bank’s net interest margin (NIM), a key profitability metric, fell to 4.90% from 5.52% in the year-ago period. Chief Executive and Managing Director R Subramaniakumar attributed 0.40% of this decline to the bank’s microfinance portfolio.
Rising Stress in Microfinance Portfolio
RBL Bank reported that loan slippages in its microfinance book rose significantly to ₹535 crore, compared to the usual range of ₹125-₹150 crore. Subramaniakumar cited multiple factors behind this surge, including over-leverage among borrowers and broader issues affecting the microfinance sector.
“There are smaller challenges as well, including a nationwide campaign that has contributed to a tendency among borrowers to delay repayments. Additionally, there are localised concerns, such as reluctance among borrowers in certain Karnataka districts to clear dues,” Subramaniakumar said.
Collection Efficiency Shows Improvement
Despite these challenges, the bank reported signs of improvement in loan recoveries. Collection efficiency in the microfinance segment rose to 97% in December, up by one percentage point from the previous two months.
While RBL Bank continues to navigate financial pressures and regulatory scrutiny, investors remain cautious. The impact of the GST search and the ongoing stress in the microfinance portfolio will be closely watched in the coming quarters.
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