The Serious Fraud Investigation Office (SFIO) has intensified its probe into alleged financial irregularities linked to IndusInd Bank, with the investigation now focusing on two key areas—nearly ₹1,000 crore in suspected internal treasury transactions and possible evergreening of loans worth around ₹2,000 crore in the bank’s microfinance arm Bharat Financial Inclusion Limited (BFIL).
Scrutiny of Internal Treasury Operations
According to sources familiar with the matter, SFIO is likely to submit its preliminary findings to the Ministry of Corporate Affairs by the end of May or early June. The bank, in its official response, has maintained that it is fully cooperating with regulatory authorities and has described the allegations as “unverified and under examination.”
A significant portion of the probe is centered on internal treasury operations involving transactions estimated at around ₹1,000 crore. Investigators are examining whether these trades were executed in line with proper internal approval protocols or if there were violations of established governance procedures.
Sources indicate that the scope of the suspected irregularities initially began at around ₹250 crore but expanded significantly as the investigation progressed, reaching nearly ₹1,000 crore. Authorities are currently trying to establish whether senior management approvals were obtained before these trades were executed or if documentation was completed after the fact.
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Documentation Gaps and Authorization Lapses
In several instances, investigators have reportedly found gaps in documentation, including missing email approvals and incomplete audit trails. This has raised concerns over whether the transactions were carried out without proper authorization. Agencies are also examining whether any individuals involved may have derived financial benefit from these trades.
Separately, the probe into BFIL has expanded into its microfinance loan portfolio, where accounting entries linked to approximately ₹2,000 crore are under scrutiny. Allegations suggest that these entries may have been structured in a way that understated the level of stressed assets, potentially masking the true extent of non-performing assets (NPAs).
Asset Misclassification and Evergreening Concerns
Officials are reviewing whether these practices amount to loan evergreening, a method in which fresh loans or accounting adjustments are used to conceal deteriorating loan quality. Both current and former employees, along with statutory auditors, are being questioned to verify the legitimacy of these entries.
The seriousness of the investigation increased after reports emerged that the bank’s former Chief Financial Officer (CFO) had cited internal pressure as one of the reasons for his resignation. He reportedly told investigators that he was under pressure to approve financial statements involving contentious accounting entries.
Transition to Deeper Regulatory Enforcement
The SFIO probe was expanded after earlier findings by the Mumbai Economic Offences Wing (EOW), which initially looked into suspected irregularities in treasury operations. While early assessments did not point to large-scale fund diversion, concerns regarding questionable accounting practices persisted, prompting a deeper investigation by SFIO.
The bank has previously informed stock exchanges that it has made adequate provisions related to the disputed accounting entries and continues to extend full cooperation to regulators. However, investigators believe the final outcome will depend on the detailed analysis of digital records, transaction logs, email communications, and audit documentation.
At present, SFIO is closely examining the end-to-end digital trail of transactions to determine whether the issues are limited to procedural lapses or indicative of broader financial misconduct. A clearer picture is expected once the agency submits its preliminary report in the coming weeks.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
