Another Accounting Lapse! IndusInd Bank's New Audit Finds Rs 674 Crore Interest 'Incorrectly' Reported In MFI

IndusInd Bank's Account Discrepancies: IndusInd Bank has reported yet another accounting irregularity. After a whistleblower's complaint, IndusInd Bank carried out a new internal audit report (IAD), which found Rs 674 crore worth of interest reported incorrectly in its books. The latest finding only deepens the discrepancy woes for IndusInd Bank.

As per the regulatory filing, IndusInd Bank reveals that pursuant to the receipt of a whistleblower complaint, the IAD was asked by the Audit Committee of the Board to review transactions recorded in "other assets" and "other liabilities".

On April 22, 2025, IndusInd disclosed that the Internal Audit Department (IAD) conducted a review of the Bank's MFI business to examine certain concerns which had been brought to the Bank's attention.

On May 15, IndusInd Bank announced, "The IAD has since submitted its report on May 8, 2025. Based on the report, it is noted that a cumulative amount of Rs. 674 crores was incorrectly recorded as interest over three-quarters of FY 24-25, which was fully reversed as of January 10, 2025. "

The latest IAD finding comes after a receipt of a whistle-blower complaint.

It said, " The IAD has submitted its report on May 8, 2025 that there were unsubstantiated balances aggregating to Rs. 595 crores in "other assets" accounts of the Bank. These were set off against corresponding balances appearing in "other liabilities" accounts in January 2025."

Also, the IAD 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.

"We are conscious of our disclosure obligations under Regulation 30 of the Listing Regulations and shall continue to comply with the same," IndusInd said on May 15.

Last month, IndusInd Bank witnessed major exits of CEO Sumanth Kathpalia on April 30th and Deputy CEO Arun Khurana's resignation on April 28.

Khurana along with the CEO Sumant Kathpalia of IndusInd Bank have been under RBI's radar since last month. In March, RBI cut short IndusInd Bank's CEO Kathpalia's tenure for 1 year till March 23, 2026, compared to the three-year tenure that IndusInd Bank was mulling. As per reports, RBI asked IndusInd's CEO and Deputy CEO to resign from their positions due to accounting lapses in the bank, however, IndusInd has denied these allegations.

Recently, IndusInd Bank identified Rs 1,979 crore discrepancies in its derivatives account after an external audit report. Based on the report, IndusInd said, "the Bank has assessed an adverse impact (on a post-tax basis) of 2.27% to the Bank's Net Worth as of December 2024 on account of these discrepancies. The Bank will appropriately reflect the resultant impact in the financial statements for FY 2024-25 and continue to take suitable steps to augment the internal controls relating to the derivative accounting operations of the Bank.