PwC Submits Report On IndusInd's Accounting Discrepancies; Bank Denies
IndusInd Bank denied receiving the report from the external agency.
External auditor PwC has submitted its report on IndusInd Bank Ltd.'s accounting discrepancies to the private lender's board, sources told NDTV Profit on Wednesday.
The report contains details of investigation into accounting discrepancies at the bank, which will be reviewed by the board to determine further course of action, the persons said.
The lender has, however, disputed this, stating that they have not received the report. "IndusInd Bank hereby clarifies that the bank has not received the report from the external agencies who are conducting the review," a spokesperson of the bank said.
Meanwhile, the board also awaits Grant Thornton's review of the discrepancies.
According to claims by the management on March 10, the lender had appointed an external agency in October to ratify its internal review of the derivatives portfolio. NDTV Profit had later reported that this external agency was PwC.
NDTV Profit had also reported that the bank likely delayed sharing information with PwC, leading to delays in completion of the audit.
On March 20, IndusInd Bank's board commissioned another independent investigation into the accounting discrepancies. It was later clarified that this independent investigation would be conducted by Grant Thornton.
The investigation aims to determine the root cause of these discrepancies and assess the accuracy of the derivative contracts' accounting treatment against established standards. Additionally, the Grant Thornton investigation will also identify any lapses and establish accountability in the case.
The Reserve Bank of India is awaiting the results of this internal accountability exercise, specifically the board's adoption of the independent firm's report, before deciding on any regulatory action. The RBI will base its actions on the board's findings regarding the accounting lapses, NDTV Profit had reported.
Separately, the bank's board also must submit to the RBI the names of potential successors to MD & CEO Sumant Kathpalia by October. Kathpalia was given a truncated one year tenure by the RBI on March 7, even though the bank's board had recommended a three-year tenure extension.
