ICAI to Review IndusInd Bank’s Financials Amid Fraud Concerns

The Institute of Chartered Accountants of India (ICAI) will review the financial statements of IndusInd Bank for the financial years 2023-24 and 2024-25 in response to recent fraud allegations. This development follows the bank’s admission of accounting discrepancies in its foreign exchange derivative portfolio.

ICAI President Charanjot Singh Nanda confirmed the decision, stating that the Financial Reporting Review Board (FRRB) will conduct the review. The FRRB, established in 2002, is responsible for promoting transparent financial reporting and ensuring compliance with regulatory standards. If the board finds the financial statements do not present a true and fair view, the matter may be escalated to ICAI’s disciplinary committee.

In March, reports had already indicated that ICAI was likely to take suo motu cognisance of the issue, which stemmed from irregularities uncovered during the bank’s internal audit. These discrepancies span seven to eight years, culminating in FY24.

IndusInd Bank has estimated that the impact of the irregularities could reduce its net worth by approximately 2.35 percent as of December 2024. This translates to a financial impact of about Rs 1,600 crore after tax and Rs 2,100 crore before tax.

Despite the findings, the bank has assured stakeholders that it has sufficient capital reserves to absorb the losses. However, the news has significantly affected investor sentiment, leading to a noticeable decline in the bank’s stock price.

The ICAI’s proactive step aims to restore trust in financial reporting and uphold the integrity of India’s financial system.