The Serious Fraud Investigation Office (SFIO) met and interacted with IndusInd Bank officials and will send a written communication to the bank seeking details related to accounting discrepancies identified at the bank, the Hinduja-owned IndusInd Bank stated in a regulatory statement.
The bank stated that under the RBI’s ‘Master Directions on Fraud Risk Management In Commercial Banks & All India Financial Institutions’ dated July 15, 2024, any fraud involving Rs 1 crore or more reported to the RBI must also be reported to the SFIO, which functions under the Ministry of Corporate Affairs (MCA), in the same format.
Accordingly, matters relating to the accounting of internal derivative trades, certain unsubstantiated balances under “other assets” and “other liabilities”, and issues linked to microfinance interest and fee income were reported to the SFIO on June 2, 2025, the filing mentioned.
It was reported earlier that the MCA ordered an SFIO investigation into the IndusInd Bank after statutory auditors and forensic reports flagged significant accounting irregularities, citing public interest concerns.
Significantly, the latest development came even as the Mumbai Police’s Economic Offences Wing (EOW) is preparing to close its preliminary inquiry after finding no evidence of fund siphoning or diversion.
IndusInd Bank reported a net loss of Rs 2,329 crore in the January–March quarter (Q4FY25), after sharply increasing provisions and reversing incorrectly booked revenue and income entries linked to accounting discrepancies in its derivatives and microfinance businesses discovered during the quarter.
In March 2025, the bank disclosed that an internal review had uncovered discrepancies in its derivatives portfolio.
Subsequently, it appointed external agencies to assess the extent of the impact and identify the root cause behind the discrepancies.
Investigations revealed that between FY16 and FY24, the bank had entered into several derivative transactions where the accounting treatment was not in line with prescribed accounting guidelines. This resulted in the recognition of notional income in the profit and loss account, with corresponding balances reflected under assets over multiple years.
Later, the bank was forced to write off Rs 1,959.98 crore of such accumulated notional profit in FY25.