According to report, the latest accounting discrepancies flagged by the whistleblower involve complex adjustments under the “other assets” and “other liabilities” heads in the bank’s financials—entries that fall under operating expenses. These discrepancies are reportedly separate from the previously disclosed issues related to the bank’s derivatives portfolio, which had already drawn regulatory scrutiny.
Notably, the whistleblower letter was delivered to IndusInd Bank’s senior management just days before the Reserve Bank of India (RBI) extended CEO Sumant Kathpalia’s tenure by one year on March 6, 2025. However, on April 29, 2025, Kathpalia resigned with immediate effect, citing “moral responsibility” for the discrepancies already uncovered.
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Rs 1,960 Cr Hit from Derivatives, Rs 600 Cr Red Flag in Microfinance
The bank had earlier acknowledged accounting lapses in its derivatives portfolio, estimating a potential impact of ₹1,960 crore for FY2024-25. An external auditor later confirmed this figure, reporting a cumulative ₹1,959.98 crore loss to the bank’s Profit & Loss (P&L) statement as of March 31, 2025.
The same whistleblower letter also flagged an unreported issue concerning a ₹600 crore discrepancy in interest income from the bank’s microfinance portfolio, raising serious concerns about revenue recognition practices. These developments come as the bank has not yet released its Q4 or FY2025 financial results, increasing anxiety among stakeholders and market observers.
Allegations of Favoritism and Governance Issues Surface
Apart from financial irregularities, the whistleblower note reportedly accused a senior bank executive of having an inappropriate relationship with a subordinate employee. The staff member in question was terminated and later rehired by the same executive, raising serious questions about internal governance and HR practices at the bank.
With the RBI already monitoring the fallout from the derivative misstatements and now facing fresh allegations, pressure is mounting on IndusInd Bank to come clean. The bank’s internal audit department is actively investigating, and further disclosures may follow once its quarterly results are announced.