IndusInd Bank Faces SFIO Investigation Over Derivatives Accounting Lapse

The Serious Fraud Investigation Office (SFIO) has started an investigation in an accounting fraud in the derivatives segment of the private sector banks, IndusInd Bank. The reason for the investigation was an accounting fraud, resulting in a loss of ₹1,960 crore. The notice for investigation was received on December 23rd, as stated in a filing with the exchanges on Wednesday.

This is timely as the Economic Offences Wing of the Mumbai Police is also set to close its preliminary investigation since no evidence of misappropriation or embezzlement of funds has been seen. It is reported that no evidence of misappropriation or diversion of funds was seen during its preliminary investigation since August. This means that there is no need for filing a preliminary complaint or FIR.

The bank said its external auditor had in April reported an adverse accounting impact of ₹1,959.98 crore on profit and loss for the year ended March 31, 2025, due to accounting discrepancies in its derivatives portfolio. On April 15, IndusInd Bank disclosed a base report from another external agency. It stated that accounting errors in its derivatives portfolio would have a negative impact of ₹1,979 crore on the bank's net worth.