Rs.2000 Crore Loss: IndusInd Bank will take action against People responsible for such Big Loss

IndusInd Bank has announced that its board is taking important steps to address the recent accounting errors identified in the bank’s financial statements. The bank’s board is working to hold accountable those responsible for the lapses and to realign the roles and responsibilities of its senior management. This decision follows the submission of a report by an independent firm on April 26, 2025.

What the Report Found

According to the report, the bank’s Profit & Loss (P&L) statement will reflect a significant negative impact of Rs 1,959.98 crores by March 31, 2025. This amount is consistent with what the bank had earlier disclosed on April 15, 2025.

The bank confirmed in a regulatory filing that it will properly include the effects of these accounting errors in its financial statements for the fiscal year 2024-25. Additionally, the bank is taking steps to improve its internal controls to prevent such issues from happening again.

What Led to the Accounting Lapses

The independent firm’s investigation identified that the main cause of the accounting errors was the incorrect handling of internal derivative trades. Specifically, the issues arose when trades were terminated early, leading to the wrong recording of notional profits. This discrepancy in how profits were reported has resulted in the accounting problems.

Bank’s Plans Moving Forward

To address these issues, IndusInd Bank has already taken action by stopping internal derivative trades as of April 1, 2025. The bank has also stated that it will continue to strengthen its internal controls to ensure that similar issues do not occur in the future.

Impact on the Bank’s Financial Health

Earlier, the bank had warned that the accounting issues in its derivative portfolio would negatively affect its net worth by about Rs 1,979 crore. Based on its assessment, the bank expects this discrepancy to reduce its net worth by approximately 2.27% (after taxes) as of December 2024.

In previous reports, the bank had mentioned that the accounting errors would impact around 2.35% of its net worth for the same period. IndusInd Bank is now working to fix these issues and ensure more accurate financial reporting moving forward.

IndusInd Bank is taking necessary steps to address the accounting errors and strengthen its internal controls. These actions are part of the bank’s commitment to improving its financial reporting and restoring investor confidence.

Indusind Bank Share Price