IndusInd Bank denies forensic audit by EY, clarifies ongoing internal review

IndusInd Bank has issued a clarification denying reports that it has appointed Ernst & Young (EY) for a second forensic audit amid concerns over a Rs 600 crore discrepancy in its microfinance portfolio.

In a clarification shared today, the bank said, "the Bank has not engaged EY for a forensic audit as reported. As a part of the process of finalization of accounts, the Banks Internal Audit Department (IAD) is conducting a review of the Banks MFI business to examine certain concerns which have been brought to the Banks attention."

The lender emphasized that EY has been brought in solely to assist the Internal Audit Department in reviewing "certain records of the Bank" and added that "the review by the bank is ongoing."

 

The clarification comes in response to media reports that triggered a sharp 4.88% fall in the banks share price, dragging it down to Rs 787.65 today.

Reports surfaced earlier today suggesting that IndusInd Bank had appointed EY for a second forensic probethis time into a Rs 600 crore anomaly in its microfinance portfolio. The discrepancy, believed to be linked to interest income accruals, reportedly emerged during the statutory audit for the previous financial year.

Sources cited in the reports claimed that statutory auditors had issued an alert under Section 143(12) of the Companies Act, 2013a provision invoked when fraud is suspected. This, in turn, prompted the bank to deepen its review process.

Importantly, this internal review is unfolding alongside a separate ongoing forensic audit by Grant Thornton Bharat, which is investigating irregularities in the banks forex derivatives operations.

While initial findings suggest the microfinance discrepancy may be limited to just a couple of quarters and not a multi-year issue, the back-to-back revelations have reignited concerns over the banks internal controls, governance standards, and accounting oversight.

For now, the bank is holding its groundasserting transparency and cooperationwhile markets await further clarity from the internal audits findings.

IndusInd Bank offers a wide range of products and services for individuals and corporates, including microfinance, personal loans, personal and commercial vehicle loans, credit cards and SME loans.

The banks standalone net profit declined 39% to Rs 1,401.28 crore while total income increased 8.5% YoY to Rs 15,151.01 crore in Q3 FY25 over Q3 FY24.

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