Mumbai
Private sector lender IndusInd Bank on Friday said the Serious Fraud Investigation Office (SFIO) has interacted with bank officials this week and will send a written communication seeking specific details related to the accounting discrepancies identified at the bank.
In a regulatory filing, the bank said that under the Reserve Bank of India’s Master Directions on Fraud Risk Management in Commercial Banks (including Regional Rural Banks) and All India Financial Institutions dated July 15, 2024, any fraud involving Rs 1 crore or more reported to the Reserve Bank of India (RBI) must also be reported to the SFIO, Ministry of Corporate Affairs (MCA), in the same format. Accordingly, matters relating to the accounting of internal derivative trades, certain unsubstantiated balances under other assets and other liabilities, and issues linked to microfinance interest and fee income were reported to the SFIO on June 2, 2025.
Earlier reports had indicated that the MCA ordered an SFIO probe into IndusInd Bank after statutory auditors and forensic reports flagged significant accounting irregularities, citing public interest concerns. This development comes even as the Mumbai Police’s Economic Offences Wing (EOW) is preparing to close its preliminary inquiry after finding no evidence of fund siphoning or diversion.
IndusInd Bank reported a net loss of Rs 2,329 crore in the January–March quarter (Q4FY25), after sharply increasing provisions and reversing incorrectly booked revenue and income entries linked to accounting discrepancies in its derivatives and microfinance businesses discovered during the quarter.
In March 2025, the bank disclosed that an internal review had uncovered discrepancies in its derivatives portfolio. It subsequently appointed external agencies to assess the extent of the impact and identify the root cause. Investigations revealed that between FY16 and FY24, the bank had entered into several derivative transactions where the accounting treatment was not in line with prescribed accounting guidelines.
