Capital market regulator Sebi is examining for any major violations in the IndusInd Bank case as per its remit, chairman Tuhin Kanta Pandey said on May 22, after the lender disclosed suspected fraud and reports of insider trading.
“RBI is looking into IndusInd Bank accounting discrepancies. Whatever Sebi has to do in relation to it, whatever Sebi’s remit is, Sebi is doing. It is RBI’s remit but if there are any egregious violations by anyone in its capacity Sebi is looking into it,” Pandey said while speaking at an Assocham event in New Delhi.
The regulator's comments come in light of several IndusInd Bank officials being under scanner for insider trading charges.
The private lender posted a net loss of Rs 2,328.92 crore for the fourth quarter of financial year 2024–25. This marked its first earnings report since the bank unearthed major accounting discrepancies, which triggered regulatory scrutiny, top-level resignations, and multiple audits.
IndusInd Suspects Fraud
The bank’s board of directors, in post-earnings call with analysts, said it suspects a case of fraud involving certain employees who played a key role in financial reporting and accounting. The board has initiated all actions required under applicable laws, including reporting the matter to regulatory and investigative authorities.
The internal audit committee, citing investigation findings, indicated likely involvement of former Key Managerial Personnel (KMP) and other senior officials. “On the basis of revaluation of the findings, there is likely involvement of senior bank officials including former KMP in overriding internal control across functions and concealment from the board and statutory auditors of the wrongful accounting practices adopted over such period of time, as indicated in the respective investigation and review reports,” the committee stated.
Fee Income Inflated, Reversed in Q4FY25
The bank’s audit department revealed on May 21 that Rs 172.58 crore had been wrongly recorded as fee income in its microfinance business over three consecutive quarters ending December 2024. The discrepancy was reversed in the fourth quarter of FY25, contributing to the reported loss.
Leadership Transition
IndusInd Bank chairman Sunil Mehta said the board is treating the matter with “utmost seriousness” and has taken additional steps to prevent similar lapses in future. “The lender is also cognisant of the need to improve the governance culture,” he added.
The bank is reviewing roles and responsibilities of staff involved and is working to fix accountability in line with its internal code of conduct. Mehta also informed that the board will submit its recommendation for the appointment of a new chief executive officer to the Reserve Bank of India by June 30.
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