The Securities and Exchange Board of India (SEBI) is examining for any major 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 on Thursday.
While speaking at an Assocham event, as cited by IANS, Tuhin Kanta Pandey said, “RBI is looking into IndusInd Bank accounting discrepancies. Whatever Sebi has to do in relation to it, whatever Sebi’s remit is, Sebi is doing. It is RBI’s remit but if there are any egregious violations by anyone in its capacity Sebi is looking into it.”
The statement came after IndusInd Bank raised the possibility of fraud involving ‘certain employees’ who had key roles in the accounting and financial reporting of the Bank. On Thursday, IndusInd Bank had released its fiscal fourth quarter earnings report with a net loss of Rs 2,328.92 crore. This was the first financial result released by the private sector lender since uncovering accounting irregularities. The incident has led to high-level resignation including the CEO’s, regulatory investigations, and multiple audits. During a post-earnings call, the Bank’s board had said that it suspects that certain employees involved in financial reporting and accounting may have committed fraud.
Per the IANS report, the audit department on May 21 revealed that Rs 172.58 crore had been wrongly recorded as fee income in the bank’s microfinance division across three quarters ending December 2024. The error was corrected in the fourth quarter which led to the huge loss as 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. He also informed that the board of directors at IndusInd Bank will send its recommendation for the appointment of a new CEO to the RBI by June 30.