A serious lapse has been detected in the internal audit of IndusInd Bank, which has raised questions on the image and corporate governance of the bank. The bank informed the stock exchange on Thursday that an amount of ₹ 674 crore was wrongly recorded as interest income in three quarters of FY 2024-25. This entire amount has been reversed on January 10, 2025, but before that, it had become part of the balance sheet.

This lapse came to light when the audit committee of the bank received a whistleblower complaint, which pointed out irregularities related to the microfinance portfolio. After this, the audit team of IndusInd Bank reviewed the "other assets" and "other liabilities" accounts, in which more shocking things came to the fore.

Amount of 595 crores unverified

According to the bank's report of May 8, an amount of ₹595 crores turned out to be 'unverified', which was later adjusted (balancing or adjusting something) in January 2025 by balancing on both sides. This means that this amount was recorded in the bank's balance sheet for years without valid confirmation. The bank said that the role of the concerned employees is being reviewed, and strict action will be taken against those whose negligence will be revealed. Apart from this, steps are also being taken to strengthen the internal control system. The whole matter gained further momentum when it came out that EY (Ernst & Young) was also included in this investigation. EY was added because there was a suspicion of irregularities of about ₹600 crore in the bank's microfinance portfolio. As of the December 2024 quarter, the bank's MFI portfolio was ₹32,564 crore, which is 9% of the total loan book.

The company's MD has resigned.

Earlier also, after the bank's derivative portfolio suffered a loss of about ₹2,000 crore, the bank's MD and Deputy CEO resigned, taking moral responsibility. Now the Reserve Bank has allowed the formation of an "Executive Committee" on an interim basis, which will take charge of the bank's operations till the appointment of a new CEO. This matter is a warning not only for IndusInd Bank but for the entire banking sector that reliable operations are not possible without transparency and accountability.

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