IndusInd Bank shares: Rs 674 crore discrepancy! MFI portfolio under scrutiny

Shares of IndusInd Bank Ltd are in focus after the private lender, which reported Rs 1,960-crore accounting discrepancies in its derivatives portfolio earlier, announced yet another Rs 674-crore discrepancy in its accounts. This time, it is regarding the MFI portfolio. 

To recall, on April 22, the bank had disclosed that its Internal Audit Department (IAD) was conducting a review of the lender's MFI business to examine "certain concerns", which had been brought to the bank’s attention.

Now IndusInd Bank said its IAD has submitted its report on May 8 and, based on that report, a cumulative amount of Rs 674 crore was found to be incorrectly recorded as interest over three quarters of FY24-25. This was fully reversed as on January 10, 2025, it said.

IndusInd Bank has lost 45 per cent of its market value in the past one year. The private bank's CEO Sumant Kathpalia and deputy CEO Arun Khurana recently resigned, with the RBI constituting a committee of executives, comprising of Head of Consumer Banking -- Soumitra Sen, and Chief Administrative Officer -- Anil Rao, to oversee the operations of the bank under the oversight and guidance of an oversight committee of the board. 

Meanwhile, following another whistle blower complaint, the bank's IAD was asked by the audit committee of the board to review transactions recorded in “other assets” and “other liabilities”. 

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

IndusInd Bank said its IAD has also 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," it said. 

Earlier, IndusInd Bank said the accounting discrepancies in its derivatives portfolio stemmed from incorrect accounting of internal derivative trades, especially in cases of early termination. These misstatements led to the recording of notional profits, identified as the primary cause of the discrepancies, it said.