SFIO launches probe into IndusInd Bank over accounting and derivative issues
According to the filing, the inquiry relates to issues the bank had previously disclosed, including the accounting treatment of internal derivative trades, unexplained balances reflected under “other assets” and “other liabilities,” and certain concerns linked to interest and fee income from its microfinance business.
- Dec 24, 2025,
- Updated Dec 24, 2025 9:55 PM IST
The Serious Fraud Investigation Office (SFIO) has launched a formal probe into the affairs of IndusInd Bank under Section 212 of the Companies Act, 2013, the private sector lender disclosed in a regulatory filing on Wednesday. The bank said it received a communication dated December 23, 2025, from the SFIO seeking information and documents in connection with the investigation.
According to the filing, the inquiry relates to issues the bank had previously disclosed, including the accounting treatment of internal derivative trades, unexplained balances reflected under “other assets” and “other liabilities,” and certain concerns linked to interest and fee income from its microfinance business.
"We hereby inform that the bank has received a letter dated December 23, 2025, from SFIO, regarding an investigation into the affairs of IndusInd Bank Ltd under Section 212 of the Companies Act, 2013 seeking relevant information,” the bank said in a regulatory filing on Wednesday.
Section 212 empowers the central government to assign complex and serious cases of corporate fraud to the SFIO, granting the agency wide-ranging authority to examine financial records, summon individuals and investigate suspected misconduct in the public interest.
IndusInd Bank had earlier informed stock exchanges on December 18, 2025, that these matters had already been reported to the SFIO on June 2, 2025, in line with regulatory requirements. At that time, the bank said it had held preliminary discussions with SFIO officials and was awaiting formal written communication, which has now been received.
The lender had clarified that the reporting was mandated under the Reserve Bank of India’s Master Directions on Fraud Risk Management, issued on July 15, 2024. These rules require banks to report all frauds involving ₹1 crore or more not only to the RBI but also to the SFIO under the Ministry of Corporate Affairs. Accordingly, IndusInd Bank said it had proactively shared details related to the derivative accounting issues, unsubstantiated balance sheet items and microfinance-related income with the investigating agency.
The bank said it is extending full cooperation to law enforcement authorities and will provide all information sought as part of the investigation. It also confirmed that the disclosure has been made public through filings with stock exchanges and on its website.
The SFIO probe comes against the backdrop of significant accounting concerns flagged earlier this year. In April, the bank’s external auditor highlighted a cumulative adverse impact of ₹1,959.98 crore on the profit and loss account as of March 31, 2025, stemming from discrepancies in the derivatives portfolio. On April 15, IndusInd Bank separately disclosed findings from another external agency, which estimated a negative impact of ₹1,979 crore on the bank’s net worth due to accounting lapses linked to derivative transactions.
The bank has assessed that these discrepancies would result in an adverse impact of around 2.27% on a post-tax basis to its net worth as of December 2024. In a subsequent disclosure, it pegged the impact at approximately 2.35% of net worth, underscoring the material nature of the accounting issues now under regulatory scrutiny.
Shares of IndusInd Bank closed at Rs 848.25, down by 0.05%.
The Serious Fraud Investigation Office (SFIO) has launched a formal probe into the affairs of IndusInd Bank under Section 212 of the Companies Act, 2013, the private sector lender disclosed in a regulatory filing on Wednesday. The bank said it received a communication dated December 23, 2025, from the SFIO seeking information and documents in connection with the investigation.
According to the filing, the inquiry relates to issues the bank had previously disclosed, including the accounting treatment of internal derivative trades, unexplained balances reflected under “other assets” and “other liabilities,” and certain concerns linked to interest and fee income from its microfinance business.
"We hereby inform that the bank has received a letter dated December 23, 2025, from SFIO, regarding an investigation into the affairs of IndusInd Bank Ltd under Section 212 of the Companies Act, 2013 seeking relevant information,” the bank said in a regulatory filing on Wednesday.
Section 212 empowers the central government to assign complex and serious cases of corporate fraud to the SFIO, granting the agency wide-ranging authority to examine financial records, summon individuals and investigate suspected misconduct in the public interest.
IndusInd Bank had earlier informed stock exchanges on December 18, 2025, that these matters had already been reported to the SFIO on June 2, 2025, in line with regulatory requirements. At that time, the bank said it had held preliminary discussions with SFIO officials and was awaiting formal written communication, which has now been received.
The lender had clarified that the reporting was mandated under the Reserve Bank of India’s Master Directions on Fraud Risk Management, issued on July 15, 2024. These rules require banks to report all frauds involving ₹1 crore or more not only to the RBI but also to the SFIO under the Ministry of Corporate Affairs. Accordingly, IndusInd Bank said it had proactively shared details related to the derivative accounting issues, unsubstantiated balance sheet items and microfinance-related income with the investigating agency.
The bank said it is extending full cooperation to law enforcement authorities and will provide all information sought as part of the investigation. It also confirmed that the disclosure has been made public through filings with stock exchanges and on its website.
The SFIO probe comes against the backdrop of significant accounting concerns flagged earlier this year. In April, the bank’s external auditor highlighted a cumulative adverse impact of ₹1,959.98 crore on the profit and loss account as of March 31, 2025, stemming from discrepancies in the derivatives portfolio. On April 15, IndusInd Bank separately disclosed findings from another external agency, which estimated a negative impact of ₹1,979 crore on the bank’s net worth due to accounting lapses linked to derivative transactions.
The bank has assessed that these discrepancies would result in an adverse impact of around 2.27% on a post-tax basis to its net worth as of December 2024. In a subsequent disclosure, it pegged the impact at approximately 2.35% of net worth, underscoring the material nature of the accounting issues now under regulatory scrutiny.
Shares of IndusInd Bank closed at Rs 848.25, down by 0.05%.