IndusInd Bank says conducting internal review of microfinance business

IndusInd Bank's internal audit team was reviewing "certain concerns" in the Indian lender's microfinance business, the company said on Tuesday, about a month after it reported discrepancies in its currency derivatives.

 

The bank, however, stopped short of disclosing what concerns were being investigated in the microfinance unit.

 

The unit, which accounts for 9% of the bank's total loans, has been grappling with elevated bad loans since the last few quarters.

 

Earlier in the day, The Economic Times newspaper reported that the private lender had appointed EY to conduct a forensic audit to probe a 6-billion-rupee ($70.5 million) discrepancy in the microfinance portfolio.

 

The lender said in a statement that it had engaged EY to assist with the review, but did not refer to the amount mentioned by the newspaper.

 

In March, IndusInd reported a $175 million accounting discrepancy in its currency derivatives book, dating back six years, and appointed an external agency to review the findings.

 

IndusInd's shares, which have fallen 13% since the derivative accounting lapse was disclosed, closed 5% lower on Tuesday.