IndusInd Bank flags Rs 674 crore interest mis-statement in internal audit

IndusInd Bank on Thursday issued a clarification following reports of accounting irregularities, confirming that its Internal Audit Department (IAD) had identified discrepancies in the bank’s microfinance business and flagged certain balances in its financial accounts.

In a stock exchange filing, the bank said it had disclosed on April 22 that the IAD was conducting a review of its microfinance operations after certain concerns were raised. As part of this review, the IAD submitted a report on May 8 noting that an amount of Rs 674 crore was incorrectly recorded as interest income across three quarters of FY25. The bank clarified that the entire amount was reversed as of January 10, 2025.

Further, based on a whistle-blower complaint, the IAD was asked to examine transactions recorded under "Other Assets" and "Other Liabilities." In its findings dated May 8, the audit department reported unsubstantiated balances of Rs 595 crore under "Other Assets."

The IAD also reviewed the roles and actions of key employees linked to these transactions. The bank said its board is taking steps to strengthen internal controls, ensure accountability, and will take appropriate action based on the audit findings.