SFIO launches probe into IndusInd Bank over accounting discrepancies
Mumbai, Dec 24, 2025
IndusInd Bank says SFIO has launched an investigation under Section 212 and sought information after discrepancies were flagged in derivatives and microfinance accounting
Private sector lender IndusInd Bank on Wednesday said that the Serious Fraud Investigation Office (SFIO) is investigating into the affairs of the bank under Section 212 of the Companies Act, 2013, and has sought relevant information from the lender.
Last week, the bank had notified the exchanges that SFIO interacted with its officials, and that it would send a written communication, seeking specific details related to the accounting discrepancies identified at the bank.
“…we hereby inform that the bank has received a letter dated December 23, 2025, from SFIO regarding an investigation into the affairs of IndusInd Bank Limited u/s 212 of the Companies Act, 2013, seeking relevant information,” the lender said in an exchange notification. “The bank continues to give full cooperation and support to law enforcement agencies,” it added.
Earlier reports had indicated that the Ministry of Corporate Affairs (MoCA) had ordered an SFIO probe into IndusInd Bank after statutory auditors and forensic reports flagged significant accounting irregularities, citing public interest concerns.
In March 2025, the bank disclosed that an internal review had found discrepancies in its derivatives portfolio. Subsequently, it appointed external agencies to assess the extent of the impact, and identify the root cause.
Investigations revealed that the bank had carried out several derivatives transactions between 2015-16 (FY16) and FY24 where the accounting treatment was not in line with prescribed accounting guidelines. This led to the recognition of notional income in the profit and loss account, with corresponding balances reflected under assets over multiple years. The bank has since written off ₹1,959.98 crore of such accumulated notional profits in FY25.
In addition, the lender set off ₹595 crore of unsubstantiated balances under “other assets” and “other liabilities”. Further, a review of the microfinance portfolio also revealed incorrect recognition of interest income of ₹673.82 crore and fee income of ₹172.58 crore. The reversal of these entries resulted in an adverse impact of ₹422.56 crore in the fourth quarter of 2024-25 (Q4FY25).
The bank also identified misclassification of certain microfinance loans as standard assets, along with the accrual of interest income on these accounts. After correcting the classification, it provided for these loans at 95 per cent, amounting to ₹1,791 crore. The provision, along with the reversal of interest income, led to an adverse impact of ₹1,969 crore on the profit and loss account as on March 31, 2025.
The bank reported a net loss of ₹2,329 crore in Q4FY25, after sharply increasing provisions and reversing incorrectly booked revenue and income entries linked to accounting discrepancies in its derivatives and microfinance businesses identified during the quarter.
[The Business Standard]
