An external agency appointed by IndusInd Bank has said the root cause behind the accounting discrepancy was wrongly recording notional profits from internal derivative trades, especially when those trades ended early.
The bank hired a professional firm to thoroughly investigate the discrepancies disclosed on March 10, identify their root cause, find lapses and fix accountability. The bank’s board is taking necessary steps to fix accountability of the persons responsible for these lapses and re-align roles and responsibilities of the senior management.
The firm, which submitted its report on Saturday, has assessed the total impact on the profit and loss account at Rs 1,959.98 crore as of March 31, 2025, which is broadly in line with the amount disclosed on April 15.
“The report identifies incorrect accounting of internal derivative trades, especially in case of early termination, which resulted in recording of notional profits, as the principal root cause for accounting discrepancy,” said the bank in a filing with the stock exchanges.
According to sources, IndusInd Bank had appointed Grant Thornton to conduct a forensic review into accounting discrepancy detected in its derivatives portfolio.
IndusInd Bank on March 10 said an internal review of its derivatives portfolio revealed discrepancies that could hit its net worth by approximately 2.35% as of December 2024. It appointed an external agency to independently review its internal findings. “The bank will appropriately reflect the resultant impact of the accounting discrepancies in the financial statements for FY2024-25 and take measures to strengthen internal controls accordingly,” the filing said.