IndusInd suspects fraud within, sees deep Q4 loss

Key staff may have committed fraud, says bank; Q4 loss at worst-ever ₹2,329 cr

- Shayan Ghosh & Anshika Kayastha

IndusInd Bank Ltd on Wednesday said its board suspects fraud by key employees in its accounting and reporting departments that led to the recent financial blow-ups at the private sector lender. The bank sank to its biggest quarterly loss of ₹2,329 crore, as it provided for various discrepancies that surfaced in the last quarter.

The lender said its board was not apprised of the multiple accounting lapses, even at the time of approving financial results. The suspicion of fraud comes after receiving investigation reports on accounting of internal derivative trades, "certain unsubstantiated balances in other assets and other liabilities accounts of the bank," and microfinance interest income, the bank said in a statement.

The board came to know of the irregularities in March 2025, chairman Sunil Mehta said in an analysts' call, adding it will approach regulators and investigators. Steps have been taken to address the areas of concern, rectify any lapses in systems and processes and strengthen internal controls, Mehta added.

"The board and the management set forth its desire of maintaining trust in the institution by aspiring for and implementing higher standards of transparency and compliance," Mehta said, adding it is working with the management and all relevant stakeholders so that the bank can be forthcoming in "highlighting any irregularities which need to be addressed".

The bank is also assessing roles and responsibilities and fixing staff accountability under legal and code of conduct requirements, he said.

IndusInd's internal audit department said on Tuesday that ₹172.58 crore was incorrectly recorded as fee income in the microfinance business over three quarters ending 31 December, and reversed in the fourth quarter (Q4) of fiscal year 2025 (FY25).