The disclosures have been made by India’s fifth largest private sector lender following its Internal Audit Department (IAD) submitting a report on May 8, 2025
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ANUSHREE FADNAVIS
IndusInd Bank (IIB) on Thursday disclosed that a cumulative amount of ₹674 crore was incorrectly recorded as interest over three quarters of FY25 in its microfinance institution (MFI) business and that there were unsubstantiated balances aggregating to ₹595 crore in its “other assets” accounts.
The aforementioned disclosures have been made by India’s fifth largest private sector lender following its Internal Audit Department (IAD) submitting a report on May 8, 2025.
The Bank, in a regulatory filing, said the amount (₹674 crore), which was incorrectly recorded as interest over three quarters of FY25 in its MFI business, was fully reversed as on January 10, 2025.
The Bank noted that pursuant to receipt of a whistle blower complaint, the IAD was asked by the Audit Committee of the board to review transactions recorded in “other assets” and “other liabilities”.
The IAD found that there were unsubstantiated balances aggregating to ₹595 crore in “other assets” accounts of the bank, per the filing. These were set off against corresponding balances appearing in “other liabilities” accounts in January 2025, it added.
IIB noted that 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.
MFI biz review
IIB said the IAD conducted a review of the Bank’s MFI business to examine “certain concerns”. In connection with this exercise, the Bank engaged EY to assist the IAD in reviewing certain records.
The bank, on March 10, 2025, disclosed some discrepancies in the account balances relating to other asset and other liability accounts of the derivative portfolio. In this regard, the internal review by the bank had estimated an adverse impact of approximately 2.35 per cent of the bank’s net worth as of December 2024.
The external agency engaged by the bank to look into the aforementioned issue identified discrepancies, inter alia, relating to derivative deals.
The report by the external agency quantified the negative impact of the above as of June 30, 2024 at ₹1,979 crore.
Based on the report, the bank has assessed an adverse impact (on a post-tax basis) of 2.27 per cent to the bank’s net worth as of December 2024 on account of these discrepancies.
The bank said it will appropriately reflect the resultant impact in the financial statements for FY25 and continue to take suitable steps to augment the internal controls relating to the derivative accounting operations.
Published on May 15, 2025
