What Are the Possible Violations in the IndusInd Bank Case?

New Delhi, May 22 (NationPress) The Securities and Exchange Board of India (SEBI) is currently conducting an investigation into potential violations in the IndusInd Bank case, which arose after the bank reported suspicions of fraud and raised concerns regarding insider trading, according to SEBI Chairman Tuhin Kanta Pandey, who spoke on Thursday.

He mentioned that while the Reserve Bank of India (RBI) is focused on examining the accounting irregularities, SEBI is also exercising its authority to address the situation.

In a media briefing held during Assocham’s 16th Capital Market Conference, Pandey stated, “It is within RBI’s jurisdiction, but if any significant violations by individuals come to light, SEBI will investigate.”

This inquiry follows IndusInd Bank's announcement of potential fraud involving some of its staff members. The bank recorded a net loss of Rs 2,328.92 crore for the fourth quarter of the fiscal year 2024–25 (Q4 FY25).

This is the first financial report from the bank since the discovery of serious accounting issues, which have triggered high-profile resignations, regulatory scrutiny, and multiple audits.

During a post-earnings conference call, the bank’s board expressed concerns that certain employees responsible for financial reporting and accounting might have engaged in fraudulent activities.

The board has reported these concerns to regulatory and investigative bodies and is adhering to all legal protocols.

The internal audit committee indicated that preliminary findings suggest that some senior officials, including former Key Managerial Personnel (KMP), may have circumvented internal controls and concealed wrongful accounting practices from the board and auditors over time.

The audit department revealed on May 21 that Rs 172.58 crore had been incorrectly classified as fee income in the bank’s microfinance division over three quarters ending December 2024.

This mistake was rectified in the fourth quarter, leading to the substantial loss reported. Chairman Sunil Mehta emphasized that the board is treating the matter with utmost seriousness.

He noted that measures are being implemented to prevent such incidents in the future, making the enhancement of the bank’s governance culture a primary focus.

The bank is also reviewing the responsibilities of the employees involved and plans to enforce strict actions in accordance with its internal code of conduct.

Mehta further informed that the bank’s board will submit its recommendation for a new CEO to the RBI by June 30.