SFIO launches investigation against IndusInd Bank for accounting discrepancies in derivatives portfolio

The private lender on Wednesday informed the exchanges about receiving a letter from the white collar crime probe agency.

“In furtherance to our intimation dated December 18, 2025, wherein we had informed that matters relating to accounting of internal derivative trades, certain unsubstantiated balances in “other assets” and “other liabilities” accounts of the Bank and micro finance interest income/ fee income were reported to the Serious Fraud Investigation Office (SFIO), Ministry of Corporate Affairs, on June 2, 2025. We had also mentioned that the SFIO had telephonic conversation with Bank official and a written communication was awaited,” a company filing said.

“In this regard, we hereby inform that the Bank has received a letter dated December 23, 2025, from SFIO, regarding an investigation into the affairs of IndusInd Bank Limited u/s 212 of the Companies Act, 2013 seeking relevant information. The Bank continues to give full cooperation and support to the law enforcement agencies,” the filing further said.

The matter first came to light in March this year during the audit of the bank’s financial results for the quarter and year ended March 2025. The lender reported major accounting discrepancies worth Rs 2,600 crore due to a fraud involving senior executives and former key management personnel.

In the bank’s audited financial statements and internal audit reports, the company said issues stemmed from incorrect accounting of internal derivative trades, artificially inflated fee and interest income from its microfinance portfolio, and unsubstantiated entries in “Other Assets” and “Other Liabilities” accounts.One of the largest adjustments involved the write-off of Rs 1,960 crore of notional profits from internal trades, accumulated since FY16. The audit also uncovered incorrect booking of Rs 673.82 crore as interest income and Rs 172.58 crore as fee income over three quarters, which was reversed in the fourth quarter of FY25. Additionally, another Rs 595 crore in misclassified asset and liability entries was netted off in the books.Read more: Rs 2,600 crore accounting missteps: IndusInd Bank suspects fraud involving senior employees

The exchange filing came after market hours and IndusInd shares today closed with minor cuts at Rs 848.90 on the NSE.

The stock has been under pressure since the incident was first reported and is down over 10% on a one-year basis.