IndusInd Bank informed the stock exchange on Thursday that its internal audit department, during a review of microfinance-related transactions, discovered that ₹674 crore was erroneously recorded as interest income in the first three quarters of fiscal year 2025.
Eyes on IndusInd Bank's Shares Today
Shares of IndusInd Bank, a Mumbai-based private sector bank, will be under close scrutiny on May 16, 2025. Trading pressure on the bank's shares is anticipated due to the recent revelation by its internal audit department. The audit uncovered ₹674 crore erroneously recorded as interest income over three quarters of fiscal year 2025 during an investigation of microfinance trades. However, this error was rectified by January 10, 2025.
On May 10, when the bank informed the stock exchange about this matter, its shares experienced a significant single-day drop of approximately 27%. This issue emerged following the resignations of the bank's MD and CEO, Sumant Kathpalia, and Deputy CEO, Arun Khurana, amidst a derivatives portfolio dispute.
Major Irregularity Uncovered in IndusInd Bank's Audit Report
The roles of top bank officials are also under investigation. The bank stated that following a whistleblower complaint, the board's audit committee instructed the internal audit department to conduct a detailed review of transactions recorded under 'Other Assets' and 'Other Liabilities'.
This investigation was conducted in addition to a review of the bank's microfinance business, about which the lender informed the stock exchange on April 22. The bank also reported that the internal audit department submitted its report on May 8, 2025, which found approximately ₹595 crore of undocumented amounts in the 'Other Assets' account.
Bank Informs Stock Exchange
IndusInd Bank stated that in January 2025, a similar amount was adjusted in the 'Other Liabilities' accounts. The bank also mentioned that the internal audit department investigated the roles and responsibilities of key personnel involved in this matter.
Previously, on April 22, the bank had stated that, as part of the process of finalizing accounts, the audit department was reviewing the microfinance business to investigate certain significant concerns, with assistance from Ernst & Young (EY).
