EOW Starts Preliminary Inquiry In IndusInd Bank Case, Quizzes Former Staff

The economic offenses branch of Mumbai police has started preliminary inquiry in the case related to IndusInd Bank, two economic offences wing officials told NDTV.

The bank had written a letter to the police asking for some of its former managerial person to investigate allegations of irregularities.

There is only one preliminary inquiry in the case, that is, the FIR has not been registered yet. Usually, if a crime is proved in the investigation, an FIR occurs, otherwise the case is closed in lack of evidence.

The Economic Offences Wing has recorded the statements of former Chief Financial Officer of IndusInd Bank, staff and account department employees.

According to EOW sources, two big things are being seen in the investigation, first, why this 'natural profit' was shown in the bank's balance sheet and why did some senior officers make a profit by selling their shares before giving information to the stock market.

If needed, these former key managerial persons will be called for questioning.

According to the official, SEBI is also investigating the matter, but their focus is on a violation of market rules, while the police is being investigated completely from the criminal angle.

This has come at a crucial time for IndusInd Bank, as it looks to turn the page after the regulatory scrutiny on derivatives accounting related disclosures earlier this year.

In April, IndusInd Bank MD and CEO Sumanth Kathpalia and Deputy CEO Arun Khuranna announced their immediate resignations, taking moral accountability of the derivative accounting episode.

The investigations and reviews found involvement of senior officials and former managerial persons in overriding key internal controls.

The bank had also found concealment from board and statutory auditors and has reason to believe that suspected offences involving frauds may have been committed.

Without any one-offs, the private sector bank reported a standalone net profit of Rs 684 crore in the June quarter, as against a loss of Rs 2,236 crore in the preceding quarter.

Last week, IndusInd Bank announced the appointment of banking industry veteran Rajiv Anand as its next MD and CEO.

Anand has been given the charge for a period of three years, "with effect from August 25, 2025 up to August 24, 2028", the private lender said in a regulatory filing. However, the appointment is subject to approval from the shareholders.

The post of MD & CEO was vacant since April, after Kathpalia had resigned amid the massive accounting discrepancy row. Subsequently, the Reserve Bank of India had directed the bank to submit its CEO recommendations by June 30.

Currently, the bank is being run by a committee of two senior executives since Kathpalia and Khurana's exit. In such a scenario, IndusInd Bank has largely been focusing on maintaining business as usual, while addressing the various governance concerns.