Has SEBI Amended Its Order Against IndusInd Bank and Named Top Executives?
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Synopsis
The recent amendment by SEBI to its interim order against IndusInd Bank sheds light on the ongoing investigation into accounting irregularities. With a new emphasis on the type of documents involved, this update raises questions about the bank's internal practices as well as the roles of its top executives.
Key Takeaways
- SEBI has corrected its earlier reference from 'board note' to 'engagement note'.
- KPMG reported a significant financial loss for IndusInd Bank.
- Four senior executives have been named and barred from trading securities.
- The investigation continues as SEBI looks into accounting irregularities.
- RBI officials express confidence in the bank's stability and performance.
Mumbai, June 7 (NationPress) The Securities and Exchange Board of India (SEBI) has released a corrigendum to its interim order concerning IndusInd Bank Limited, adjusting a crucial reference to better explain the type of documents involved in the bank’s internal operations.
The market regulator indicated that the phrase ‘board note’ from its previous order will now be interpreted as ‘engagement note’.
This amendment occurs as SEBI persists in its investigation into accounting inconsistencies at the private lender.
Previously, the regulator had noted that the global consulting firm KPMG was brought on board by IndusInd Bank in February 2024 based on a ‘board note’.
However, it has now emphasized that KPMG’s engagement was actually rooted in an ‘engagement note’, a less formal document typically utilized for delegating tasks to external advisors.
The SEBI investigation uncovered that the former Chief Financial Officer of IndusInd Bank had indicated in January 2024 that a consultant was being engaged to evaluate the financial repercussions of previously identified discrepancies.
KPMG subsequently reported a financial shortfall of Rs 2,093 crore associated with these issues.
Despite the magnitude of the impact, SEBI noted that the bank failed to disclose these findings to the stock exchanges by March 10, 2025, nor did it classify the information as unpublished price-sensitive data until March 4, 2025.
KPMG reportedly sought additional discussions with bank officials to validate the figures, including specific accounting entries.
In its interim order, SEBI identified four senior executives for their alleged involvement in the situation: Arun Khurana, former Executive Director and Deputy CEO; Sushant Sourav, Head of Treasury Operations; Rohan Jathanna, Head of GMG Operations; and Anil Marco Rao, Chief Administrative Officer for Consumer Banking Operations.
These individuals have been prohibited from buying, selling, or engaging in securities in any form until further notice.
Meanwhile, on Friday, RBI Deputy Governor J Swaminathan remarked that the circumstances at IndusInd Bank are stabilizing, stating that ‘everything is more or less on track.’
RBI Governor Sanjay Malhotra also noted that the bank has made substantial improvements to its accounting practices and is generally performing well.
Point of View
We maintain a neutral stance on the matter surrounding IndusInd Bank. While the regulatory actions by SEBI are crucial for maintaining financial integrity, it is essential to observe how the bank responds to these challenges and what steps are taken to restore public trust.
NationPress
07/06/2025
Frequently Asked Questions
What is the recent development regarding SEBI and IndusInd Bank?
SEBI has issued a corrigendum to its interim order against IndusInd Bank, clarifying the nature of documents involved in the investigation into accounting irregularities.
Who are the executives named by SEBI?
SEBI has named Arun Khurana, Sushant Sourav, Rohan Jathanna, and Anil Marco Rao for their alleged involvement in the accounting irregularities.
What financial issues did KPMG report?
KPMG reported a financial loss of Rs 2,093 crore linked to discrepancies identified during their assessment.
What is the significance of the term 'engagement note'?
The term 'engagement note' refers to a less formal document used for assigning tasks to external consultants, which SEBI clarified in its recent order.
How has the RBI responded to the situation at IndusInd Bank?
RBI officials have indicated that the situation at IndusInd Bank is stabilizing, with steps taken to improve accounting standards.
