SFIO Probes IndusInd Bank Over Accounting Irregularities

IndusInd Bank on Wednesday informed stock exchanges that the Serious Fraud Investigation Office (SFIO) has initiated an investigation into the bank’s affairs under Section 212 of the Companies Act, 2013, and has sought relevant information. The lender said it received a formal communication dated December 23, 2025, from the SFIO and reiterated that it is extending full cooperation to law enforcement agencies. The disclosure follows earlier intimation that SFIO officials had interacted with the bank’s management regarding accounting discrepancies.

According to earlier reports, the Ministry of Corporate Affairs ordered the SFIO probe after statutory audit and forensic reviews flagged significant accounting irregularities, citing public interest concerns. In March 2025, the bank had disclosed that an internal review uncovered discrepancies in its derivatives portfolio, prompting the appointment of external agencies to assess the impact and identify root causes. The review found that between FY16 and FY24, certain derivatives transactions were accounted for in a manner not aligned with prescribed guidelines, resulting in the recognition of notional income. The bank subsequently wrote off ₹1,959.98 crore of accumulated notional profits in FY25.

The lender also reported additional corrections, including the set-off of ₹595 crore of unsubstantiated balances under “other assets” and “other liabilities,” and reversals related to its microfinance portfolio. Incorrect recognition of interest and fee income led to an adverse impact of ₹422.56 crore in Q4 FY25, while misclassification of certain microfinance loans resulted in provisions of ₹1,791 crore and a total profit-and-loss impact of ₹1,969 crore as of March 31, 2025. These measures contributed to a net loss of ₹2,329 crore for the January–March quarter (Q4 FY25).

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