ICAI to review IndusInd Bank's books over forex accounting lapses

IndusInd Bank on March 10 had disclosed certain discrepancies identified by the lender in its account balances relating to its derivatives portfolio

The Institute of Chartered Accountants of India (ICAI) on Thursday said it will review the books of private lender IndusInd Bank, as the statutory body took note of major accounting lapses in the len­der’s forex derivative portfolio. 

The lapses — to the tune of ₹2,600 crore — came to fore during an internal review by the bank, and go back to 7 to 8 years. ICAI will review the financial statements and the statutory auditor’s reports of the bank for the financial year 2023-24 (FY24) and 2024-25 (FY25), its President Charanjot Singh Nanda told Business Standard.  

“It has been deci­ded that our Financial Reporting and Review Board (FRRB) will undertake the review of the financial statements and the statutory auditor’s reports of the bank for the last two financial years,” Nanda said. 

IndusInd Bank on March 10 disclosed certain discrepancies identified by the lender 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. MSKA & Associates, Chartered Acco­untants and MP Chitale & Co. Chartered Acco­untants were the Joint Central Statutory Auditors of the Ind­usInd Bank for FY24, according to their annual report. The matter was deliberated by the ICAI Board at its 148th meeting held on Thursday. 

  The FRRB has a comprehensive three-tier revi­ew process to conduct the review of General-Purpose Financial Statements of selected enterprises. The Board was constituted in July 2002 to strengthen the financial reporting practices. 

 

Its review would determine compliance with the generally accepted accounting principles, the disclosure requirements and other reporting obligations.

 

If FRRB finds any serious non-compliance affecting the true and fair view of financial statements, it refers the case to the Director-Discipline of the ICAI for further investigation. The Board also informs such deficiencies to the regulatory body relevant to the enterprise for appropriate action. 

 

Besides IndusInd, the ICAI’s board has also been looking into the financial statements and the statutory auditor’s report of Gensol Engineering Ltd and BluSmart Mobility Private Limited for the financial year 2023-24. 

 

Last week, Sebi Chairman Tuhin Kanta Pandey observed that while the Reserve Bank of India was looking into the IndusInd matter, the market regulator was checking if there were any “egregious violations” by anyone.