IndusInd Bank to fix accountability, book Rs 1,960 cr loss in Q4 after derivatives probe
Private sector lender
IndusInd Bank
on Sunday said it will take action against employees responsible for lapses in its derivatives portfolio and re-align roles of senior management as part of efforts to strengthen accountability. The bank also confirmed it will absorb the full impact of losses amounting to Rs 1,959.98 crore from incorrect accounting practices in its March 2025 quarter results.
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'The Board is taking necessary steps to fix accountability of the persons responsible for these lapses and re-align roles and responsibilities of senior management,'
IndusInd Bank
said in a filing to the stock exchanges.
The move follows the completion of a detailed investigation by an independent professional firm, which was appointed by the bank's board on March 20, 2025. The probe was aimed at identifying the root cause of accounting discrepancies in the bank's derivatives portfolio disclosed earlier on March 10.
The appointed firm submitted its report on April 26, determining that the cumulative adverse impact on the bank's profit and loss account stood at Rs 1,959.98 crore as of March 31, 2025, broadly in line with earlier estimates disclosed on April 15.
According to the bank, the losses stemmed primarily from incorrect accounting of internal derivative trades, particularly in cases of early termination. These errors led to the recording of notional profits, significantly distorting the bank's financials.
'The Bank will appropriately reflect the resultant impact of the accounting discrepancies in the financial statements for FY 2024-25 and take measures to strengthen
internal controls
accordingly,' the statement added. As a preventive measure, the bank had already discontinued all internal derivative trading from April 1, 2024.
The episode first came to light on March 10, when IndusInd shocked markets by revealing that mark-to-market (MTM) losses in its derivatives book could dent up to 2.35% of its net worth as of December 2024—amounting to nearly Rs 1,600 crore. The revelation triggered a sharp
market reaction
, with the bank's shares tumbling nearly 25% from Rs 900 to Rs 686 apiece.
Following this, the bank engaged
PwC
to quantify the derivative losses initially identified in October 2024. Additionally, global audit and advisory firm Grant Thornton Bharat (GTB) was brought in last month to conduct a forensic investigation, as directed by the Reserve Bank of India (RBI). The central bank had instructed the appointment of a new firm to undertake a thorough, independent review of the discrepancies and ensure conservative loss estimation.
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