IndusInd Bank is facing significant challenges as its share price plummeted by 6.4% to an intra-day low of ₹775.40 on the National Stock Exchange. This decline follows reports that the bank has engaged EY to conduct a second forensic audit, specifically to address a ₹600 crore discrepancy tied to the accrual of interest income within its microfinance sector.
Forensic Audit Sparks Concern
According to sources cited by The Economic Times, this discrepancy was flagged during the ongoing statutory audit for the last fiscal year. As a result, auditors issued an additional notification under Section 143(12) of the Companies Act 2013, prompting the bank to initiate a forensic investigation into the matter. The role of EY is to assess potential lapses and determine accountability regarding the financial irregularities.
- Key points regarding the audit:
- EY’s investigation will complement the ongoing forensic audit by Grant Thornton Bharat (GTB), which is examining irregularities in the bank’s forex derivatives portfolio.
- The issue appears to have arisen in the last fiscal year, particularly during the second and third quarters.
Impact of Recent Discrepancies
In March 2025, IndusInd Bank disclosed that it had identified certain “accounting discrepancies” in its derivatives portfolio, with implications amounting to approximately 2.35% of the bank’s net worth—translating to a shocking ₹1,500-2,000 crore. This revelation led to a dramatic drop in the bank’s stock, which fell by over 30% in a single day, triggering a series of lower circuit limits.
Financial Performance Overview
Regarding its financial health, IndusInd Bank reported a net profit of ₹1,402.3 crore for Q3 FY25, a stark decline of 39% compared to ₹2,301 crore in the same quarter of the previous year. Additionally, the bank’s net interest income (NII) dipped by 1.3% year-on-year, settling at ₹5,228.1 crore, down from ₹5,295.6 crore.
- Recent financial highlights:
- Q3 FY25 Net Profit: ₹1,402.3 crore
- Year-on-Year Decline: 39%
- NII for Q3 FY25: ₹5,228.1 crore
Meanwhile, the broader banking sector exhibited mixed results, with the Nifty Bank index gaining 0.6%, reaching 27,892.95.
As the situation develops, stakeholders and investors will be keenly observing how the forensic audits unfold and what implications they may have on IndusInd Bank’s future performance.
