Probing possible violations in IndusInd Bank case, says SEBI Chairman

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

New Delhi: 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.

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.

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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.