Probing possible violations in IndusInd Bank case: SEBI Chairman

IANS May 22, 2025 342 views

IndusInd Bank is facing a major financial scandal involving potential fraud by its own employees. The bank reported a significant quarterly loss of Rs 2,328.92 crore after discovering accounting irregularities. SEBI and RBI have initiated investigations into the matter, focusing on potential violations and internal control breaches. The bank's board is committed to improving governance and taking strict action against employees involved in the wrongdoing.

"If there are any serious violations by anyone, SEBI is looking into it" - Tuhin Kanta Pandey, SEBI Chairman
Probing possible violations in IndusInd Bank case: SEBI Chairman
New Delhi, May 22: The Securities and Exchange Board of India (SEBI) is investigating possible violations in the IndusInd Bank case, following the bank's disclosure of suspected fraud and concerns over insider trading, SEBI Chairman Tuhin Kanta Pandey said here on Thursday.

Key Points

1

SEBI and RBI launch joint investigation into IndusInd Bank accounting irregularities

2

Bank reports Rs 172.58 crore wrongly recorded income

3

Potential fraud involves senior financial reporting employees

He said that while the Reserve Bank of India (RBI) is looking into the accounting discrepancies, SEBI is also doing its part as per its authority.

While addressing the media on the sidelines of Assocham’s ‘16th Capital Market Conference’ here, Pandey said, “It is RBI’s remit, but if there are any serious violations by anyone, SEBI is looking into it.”

These developments come after IndusInd Bank revealed a suspected fraud involving some of its own employees. The bank reported a net loss of Rs 2,328.92 crore for the fourth quarter of the financial year 2024–25 (Q4 FY25).

This is the bank’s first financial result since uncovering serious accounting irregularities. The issue has led to high-level resignations, regulatory investigations, and multiple audits.

During a post-earnings call, the bank’s board said it suspects that certain employees involved in financial reporting and accounting may have committed fraud.

The board has reported the matter to regulatory and investigative agencies and is following all legal procedures.

According to the internal audit committee, the initial investigation suggests that some senior officials, including former Key Managerial Personnel (KMP), may have bypassed internal controls and hid wrongful accounting practices from the board and auditors over a period of time.

The audit department revealed on May 21 that Rs 172.58 crore had been wrongly recorded as fee income in the bank’s microfinance division across three quarters ending December 2024.

This error was corrected in the fourth quarter, contributing to the huge loss reported. IndusInd Bank chairman Sunil Mehta said the board is taking the issue very seriously.

He added that steps are being taken to avoid such lapses in the future, and that improving the bank’s governance culture is now a top priority.

The bank is also reviewing the roles and responsibilities of employees involved and will take strict action as per its internal code of conduct.

Mehta also informed that the bank’s board will send its recommendation for the appointment of a new CEO to the RBI by June 30.

Reader Comments

R
Rajesh K.
This is really concerning for account holders like me. I've been with IndusInd for 5 years. Hope SEBI and RBI take strict action against those involved. Banks must maintain highest standards of trust. 😟
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Priya M.
As someone working in corporate governance, I'm glad this came to light. The ₹172 crore discrepancy is no small amount! Shows why strong internal audits are crucial. Hope other banks learn from this episode.
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Amit S.
SEBI and RBI need to work faster in such cases. The common man's money is at stake here. Also, why only ₹172 crore being highlighted when the loss is ₹2300+ crore? Something doesn't add up.
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Sunita R.
I appreciate that the bank is being transparent now, but this raises questions - how did this go unnoticed for so long? The auditors and board must also share responsibility. Chaltha hai attitude won't work in banking sector!
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Vikram J.
This is why I prefer nationalized banks over private ones. At least there's more accountability in PSU banks. Private banks focus too much on profits and targets, leading to such malpractices.
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Neha T.
The timing is suspicious - right after quarterly results. Hope this isn't being used to hide bigger issues. SEBI should investigate if this was deliberate window dressing of accounts. 🤔 Banking sector needs complete overhaul of oversight mechanisms.

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Tags:
IndusInd Bank SEBI Financial Fraud Banking Scandal Tuhin Kanta Pandey RBI Corporate Governance