Mumbai –
Private sector lender IndusInd Bank has reported suspected financial fraud involving senior executives and former key management personnel, following the discovery of significant accounting discrepancies amounting to Rs 2600 crore. The irregularities came to light during the audit of the bank's financial results for the quarter and financial year ended March 2025.

The bank’s audited financial statements and internal audits revealed several irregularities, including incorrect accounting of internal derivative transactions, artificially inflated interest and fee income from its microfinance portfolio, and unexplained entries under "Other Assets" and "Other Liabilities."

A major part of the misstatement relates to a write-off of Rs 1960 crore in notional profits from internal derivative trades, which had accumulated since the financial year 2016. Additionally, the bank reversed Rs 673.82 crore in wrongly booked interest income and Rs 172.58 crore in fee income during the fourth quarter of FY25, which had been previously recorded over three earlier quarters. Furthermore, Rs 595 crore worth of misclassified asset and liability entries were adjusted in the accounts.

The internal investigation found that certain senior officials had bypassed internal financial controls and concealed these improper practices from both the board of directors and the auditors for several years.

As a result of the findings, the bank’s joint statutory auditors filed a formal report with the central government, indicating suspected fraud under applicable laws. The bank stated that all necessary corrections have now been reflected in its FY25 results and that it is fully cooperating with regulatory authorities.

“The board has begun identifying individual accountability and is implementing recommendations from internal and external experts to strengthen oversight and prevent recurrence,” the bank said in an official statement.

IndusInd Bank posted a consolidated net loss of Rs 2329 crore in the fourth quarter of FY25, compared to a net profit of Rs 2349 crore in the same period last year. This decline was primarily due to the impact of losses from the derivatives segment. The bank also reported a 43 percent year-on-year drop in net interest income, which stood at Rs 3048 crore for Q4FY25, down from Rs 5376 crore in the same quarter a year earlier.

Following the announcement, IndusInd Bank’s shares fell by 2 percent to close at Rs 767 on the NSE on Friday.