IndusInd Bank Flags ₹172.58 Crore Accounting Irregularity

MUMBAI, May 21, 2025 – IndusInd Bank Ltd (NSE: INDUSINDBK | BSE: 532187) has uncovered serious accounting discrepancies amounting to ₹172.58 crore, following an internal audit and external investigation into certain transactions and income recognition practices. The bank’s board, in response, has flagged potential fraud and directed that legal and regulatory measures be pursued.

₹172.58 Crore Fee Income Error Reversed

The investigation, which included reports from an external professional firm and the Bank’s Internal Audit Department (IAD), identified the incorrect recording of ₹172.58 crore as fee income in the microfinance business over three quarters ending December 31, 2024. This misstatement has been fully reversed in the financial statements for the fourth quarter of FY25.

The discrepancies were specifically tied to:

• Internal derivative trade accounting
• Unsubstantiated balances under “other assets” and “other liabilities”
• Overstated interest income in the microfinance segment

Board Suspects Fraud; Disciplinary and Legal Action Initiated

Following the receipt of the final IAD report on May 20, 2025, the Board reviewed all findings and concluded there is sufficient ground to suspect fraud involving certain employees in key finance and accounting roles.

The Board has directed the initiation of:

• Regulatory reporting under applicable laws
• Communication with investigative agencies
• Disciplinary proceedings to fix accountability

Impact Reflected in Q4 FY25 Results

IndusInd Bank has clarified that all discrepancies identified in the reports have been appropriately adjusted in the financial results for Q4 and the full year ended March 31, 2025.

The matter was discussed during the Board meeting held on May 21, 2025, between 2:52 p.m. and 5:38 p.m. IST, before the Board proceeded with other agenda items.

Outlook

This development marks a significant compliance and governance event for IndusInd Bank, prompting scrutiny from stakeholders and regulators. While the bank has acted promptly to reverse the misstatements and escalate the matter, investor attention will remain sharply focused on the findings of further investigations and regulatory responses.

Source: https://nsearchives.nseindia.com/corporate/INDUSINDBK3_21052025181536_SEIntimation21052025.pdf