IndusInd Bank: External probe finds 'negative impact' of Rs 1,979 crore from derivative discrepancies

IndusInd Bank

IndusInd Bank on Tuesday said that it has received the findings of the external audit. The report by the external agency showed Rs 1,979 crore of ‘negative impact’ to the net worth of the bank due to the derivative discrepancies. Based on the report, the bank said that it has assessed an adverse impact of 2.27% to its net worth as of 2024.

In an exchange filing, the bank said that the impact of this derivative debacle will reflect in the FY25 financial statements. Last month, the crisis-hit lender had appointed an independent firm to carry out a probe into the into the lapses found by the bank related to its derivatives portfolio.

While the lender’s internal audit had estimated an adverse impact of 2.35 percent on net worth, the external agency report puts that number to 2.27 percent. “On 10th March 2025, the Bank had disclosed that it noted certain discrepancies in accounts balances of its derivative portfolio. The internal review by the Bank had estimated an adverse impact of approximately 2.35% of the Bank’s Net Worth as of December 2024. The Bank had also disclosed the ongoing review by an external agency which was independently reviewing the internal findings,” the lender said in the exchange filing.

Earlier this month, Reserve Bank of India governor Sanjay Malhotra had termed the IndusInd crisis as an "episode" and not a failure for entire baking system. Addressing media after the MPC announcement, Malhotra had said that country's banking system is “safe and secure”. When asked about a bigger systemic concern regarding accounting lapses, Malhotra had said, "these are not even failures, they’re episodes. These things will happen."

IndusInd Bank stocks ended at Rs 735.50 on the National Stock Exchange today. The lender's stocks have rebounded from their 52-week low of Rs 606, hit on March 12 last month.

The derivatives issue was disclosed on March 10 last month. Amid the growing governance concerns, the bank saw resignation of CFO Gobind Jain in January. Additionally, the RBI had given nod to CEO Sumant Kathpalia’s term for only one year instead of three-year period on March 7, just three days before the derivatives crisis unfolded.