IndusInd Bank sets up executive group to strengthen financial controls after Rs 1,960 crore accounting discrepancies

IndusInd Bank

Private lender IndusInd Bank has constituted an executive-level Project Management Group to strengthen internal financial systems and controls after discrepancies of about Rs 1,960 crore were identified during the financial year ended March 31, 2025, according to the earnings footnotes in the paragraph 8 (A) and (B).

The committee was set up before Rajiv Anand, who assumed charge as managing director and chief executive officer on August 25.

The outcome of the findings of the committee is expected in the coming months, Anand said during the post earnings call.

The move is part of a broader effort to enhance oversight, improve reconciliation, and reduce manual accounting entries across key portfolios, including the microfinance segment and derivative trades, where the issues were first detected, bank said.

According to the bank’s disclosure, the newly formed Project Management Group will oversee corrective measures, ensure process standardization, and tighten internal checks to prevent such lapses in the future. The implementation of these measures is being monitored on an ongoing basis, the bank said.

The board-level intervention comes after internal reviews flagged control weaknesses and accounting irregularities in specific portfolios. The Bank has also committed to strengthening governance mechanisms and reinforcing accountability among officials involved in the reconciliation and reporting process.

Uncertainty around IndusInd Bank began in March when the lender reported an accounting discrepancy linked to its derivatives portfolio. Subsequent reviews by an external agency and a Board-appointed independent professional firm estimated the adverse accounting impact at Rs 1,979 crore and Rs 1,959.98 crore, respectively.

Further, the Securities and Exchange Board of India's (SEBI) interim order released on May 27 revealed that the management of IndusInd Bank was aware of the derivatives discrepancies 15 months before the lender disclosed them to the exchanges.

In the July-September quarter, the lender has accelerated the provisions to Rs 2,631 crore as compared to Rs 1,820 crore for the corresponding quarter of previous year.

“The Bank accelerated write-offs as well as increased provisions on microfinance as a prudent measure,” Anand said.

The Provision Coverage Ratio was improved at 72% as on September 30, 2025.

IndusInd Bank Ltd reported a consolidated net loss of Rs 437 crore for the quarter ended September 30, 2025 (Q2 FY26), compared with a net profit of Rs 1,331 crore in the same period last year. The bank's loss was driven by a sharp fall in core income and a significant rise in provisions, even as the lender maintained stable asset quality and strong capital buffers.