IndusInd Bank Faces Investor Scrutiny Over Accounting Discrepancies

IndusInd Bank Faces Investor Scrutiny Over Accounting Irregularities

A big issue of concern has now beset India's fifth-largest private-sector lender, which has been found guilty of very glaring accounting irregularities resulting from unauthorized internal derivatives trades. These irregularities will lead to a hit on the bank's net worth by almost 2.35%, worth $175 million. Once the news hit on March 10, 2025, then started the decline in the share price over 27%, thereby erasing about $2 billion in market value. IndusInd Bank legal news debated from Indian financial analysts in various journals, including business news channels. 

Regulatory Investigations and Internal Audits

The SEBI has commenced an inquiry into the allegations of insider trading against five senior officials of IndusInd Bank. The investigation centers on trades done by them while they had access to unpublished price-sensitive information. In addition, SEBI is investigating whether the bank had made the required disclosures or not. 

IndusInd Bank has hired PwC to carry out a complete audit concerning the accounting irregularities. The PwC report is expected to be submitted to the bank's board on March 28, with details about real losses, lapses at various levels, and suggested corrective actions. 

Financial Reinforcement Measures

IndusInd Bank has raised $2 billion through bulk deposits in March to counter the crisis. This was the bank's biggest monthly accrual in more than two years, aimed at strengthening its funding base and liquidity should deposit withdrawals occur. The issuance of certificates of deposit with maturities between three months and one year has taken place, offering interest rates higher than the preceding months. 

Regulatory Assurance and Market Impact

The Reserve Bank of India (RBI) has issued assurances regarding the solvency of IndusInd Bank and the adequate capitalization and financial health of the bank. The cataclysm of IndusInd Bank nevertheless indicates an urgent need for governance and risk management in the Indian banking sector. 

As developments continue, stakeholders await the investigations and the consequent application of corrective measures to boost confidence in IndusInd Bank's operations.