IndusInd Bank Faces First Quarterly Loss in 19 Years Amid Major Accounting Issues

Mumbai: IndusInd Bank reported a quarterly loss of Rs 2,236 crore for the three months ending March 2025, marking its first quarterly loss since March 2006. This follows a significant reversal of its previous year’s net profit of Rs 2,346 crore, bringing its annual profit for FY25 down to Rs 2,642 crore, a 70% decline from Rs 8,950 crore in FY24.

The bank’s recent financial disclosures highlight a series of accounting irregularities that have led to a major financial setback. These issues emerged after the sudden resignations of the bank’s chief executive and deputy, following the discovery of widespread misconduct in its foreign exchange derivatives and microfinance operations.

Major Accounting Issues Uncovered

Internal and external reviews have uncovered a new fraud involving Rs 172.6 crore that was incorrectly booked as fee income in the microfinance arm. Broader discrepancies include issues in derivative trades, income recognition, and the categorization of assets and liabilities. The board has raised concerns about potential fraud involving senior employees and has indicated plans to file complaints with regulatory authorities.

Key Findings from Audits

• Internal derivatives accounting was halted in April 2024 after external reviews confirmed irregularities.
• Additional audits found that income was misclassified, loans were wrongly categorized, leading to an under-provisioning of Rs 1,885 crore.
• Interest income of Rs 760 crore was misbooked and should have been recorded elsewhere.
• The statutory audit by MSK & Associates and Chokshi & Chokshi revealed a write-off of Rs 1,960 crore in