IndusInd Bank has confirmed accounting irregularities totaling ₹1,269 crore, following an internal audit that uncovered discrepancies in interest income and asset balances. The revelation has triggered regulatory scrutiny, investor concerns, and leadership changes within the bank.
Timeline of the Fallout
- April 15, 2025: A whistleblower complaint prompts IndusInd Bank’s Internal Audit Department (IAD) to investigate financial discrepancies.
- April 22, 2025: The bank discloses that it is reviewing its Microfinance Institution (MFI) business for potential irregularities.
- May 8, 2025: The audit report confirms ₹674 crore was incorrectly recorded as interest income across three quarters of FY 2024–25, and ₹595 crore in unsubstantiated balances under “other assets” were offset against “other liabilities”.
- May 15, 2025: IndusInd Bank formally acknowledges the accounting lapses in a stock exchange filing, leading to a 2.78% drop in share price.
Regulatory and Market Impact
- SEBI and RBI Scrutiny: Regulators are closely monitoring the situation, with SEBI expected to seek further clarifications from the bank.
- Investor Sentiment: IndusInd Bank’s stock has declined 20% since the start of 2025, reflecting market concerns over governance and financial transparency.
- Leadership Changes: Reports indicate that CEO Sumant Kathpalia and other senior executives may face accountability measures following the audit findings.
Conclusion
IndusInd Bank’s accounting discrepancies have raised serious concerns about internal controls and financial reporting practices. As regulatory scrutiny intensifies, the bank’s ability to restore investor confidence will be crucial in the coming months.
