IndusInd Bank Finds More Discrepancies In Internal Audits, Reveals Whistleblower Complaint
An audit by the internal audit department found that Rs 674 crore was "incorrectly recorded as interest" over three quarters of fiscal 2025, IndusInd Bank said.
Private sector lender IndusInd Bank said that it has identified two more accounting issues in internal audits.
An audit by the internal audit department found that Rs 674 crore was "incorrectly recorded as interest" over three quarters of fiscal 2025. This amount was fully reversed as on Jan. 10, 2025, IndusInd Bank informed the exchanges on Thursday.
The bank had first disclosed last month that an internal audit was being conducted into discrepancies in the microfinance business. A report was submitted on May 8, the bank said on Thursday.
Separately, a whistleblower complaint alleging concerns in the "other assets" and "other liabilities" account, led to a separate investigation by the internal audit team. This audit too revealed Rs 595-crore worth unsubstantiated balances in the "other assets" accounts of the bank. These balances were set off against corresponding balances in the "other liabilities" accounts in January.
"The IAD has also examined the roles and actions of key employees in this context. The board is taking necessary steps to strengthen internal controls, fix accountability of the persons responsible for these lapses and will take action as appropriate," the bank said in its exchange notification.
This is the first time that the bank has revealed that it had received a whistleblower complaint, and that an internal investigation was being conducted because of it.
While these two accounting issues is unlikely to result in a financial impact on the bank's balance sheet, it brings to light concerning developments in IndusInd Bank's accounting division. On March 10, the bank had also disclosed accounting issues in its derivatives trading business, which eventually resulted in a financial hit of Rs 1,960 crore on its balance sheet for fiscal 2025.
The lender's Chief Financial Officer Gobind Jain had resigned in January, just days before reporting the December quarter results. At the time, Jain had cited other opportunities outside the bank in his resignation letter.
As a direct result of these various investigations and accounting issues, IndusInd Bank CEO Sumant Kathpalia and its deputy CEO Arun Khurana announced their immediate resignations in April.
