NFRA gets IndusInd Bank complaint; in talks with RBI to avoid probe overlap

The National Financial Reporting Authority (NFRA) has received a complaint over accounting lapses at IndusInd Bank through the Centralised Public Grievance Redress and Monitoring System (CPGRAMS), according to people in the know.

 

The authority, however, is in talks with the Reserve Bank of India (RBI) to cross-check the investigations, including a forensic audit, that the central bank has conducted so far to avoid duplication, sources said.

 

“If RBI is already looking into the same issues and they are the regulators of banks, then NFRA need not do the same exercise again,” the source said.

 

IndusInd Bank on March 10 had disclosed discrepancies identified in its account balances relating to its derivatives portfolio. The bank said its detailed internal review had estimated an adverse impact of roughly 2.35 per cent of its net worth as of December 2024.

 

NFRA’s domain of investigation includes auditors of all listed entities. The authority will soon decide whether it needs to start a preliminary inquiry into the IndusInd matter.  Last week, speaking on the sidelines of an event, Sebi Chairman Tuhin Kanta Pandey had observed that while the RBI was looking into the matter, the market regulator was checking if there were any “egregious violations” by anyone. 

 

On May 21, IndusInd reported a net loss of ₹2,329 crore in the fourth quarter of financial year 2024-2025 (Q4FY25), its worst quarterly loss ever, as it substantially ramped up provisions and reversed incorrectly booked revenue and income entries worth over ₹2,500 crore linked to accounting discrepancies in the derivatives and microfinance segments discovered during the quarter.

 

The bank said that its board suspected a “fraud may have been committed against the bank involving certain employees having a significant role in accounting and financial reporting.”

 

M S K A & Associates, Chartered Accountants and M P Chitale & Co. Chartered Accountants were the Joint Central Statutory Auditors of the IndusInd Bank for the financial year ended March 31, 2024, according to their annual report.