MC EXCLUSIVE Grant Thornton identifies 25 IndusInd Bank staff involved in derivative accounting lapses: Sources

Sources say a few senior employees in the treasury department had brought the accounting practices to the management's notice.

“There is adequate communication trail to prove that the management was made aware of the likely implications of the accounting treatment on its financials,” said a highly source who didn’t want to be named.

Such employees are likely to be retained by the bank while the others may be let go.

While Moneycontrol could not independently ascertain the number of employees who may be sacked by the bank as on outcome of the GT report, a banker, on condition of anonymity, said at least 50 percent of employees identified in the GT report may be retained by the bank. “Those retained may be moved to a different department,” he added.

Emails to IndusInd Bank and Grant Thornton remained unanswered till the time of publishing this article.

On March 10, the bank’s former management team led by Kathpalia revealed in a call with investors about lapses in accounting for derivative instruments. Even as exact details of the lapses are yet to be confirmed by the bank, Kathpalia said these lapses had been happening over a span of seven years.

Sources say the lapses largely pertain to unhedged Japanese Yen contracts, which have historically helped the bank keep its cost of funds under check.

With the GT audit still ongoing and the global firm working along with the management to fix processes across the bank’s operations, including the treasury, people with knowledge of developments in IndusInd Bank say there could be more retrenchments and exits from the bank.