IndusInd Bank share price in focus as lender faces fresh probe; key details

Shares of IndusInd Bank were in focus on Friday after the Economic Offences Wing (EOW) of the Mumbai Police reportedly began examining unsubstantiated entries worth about Rs 255 crore that were not mentioned in the bank’s original complaint disclosing a lapse of nearly Rs 2,000 crore, people familiar with the matter told The Economic Times. Another report by CNBC-TV18 pegged the ‘unsubstantiated' entry value at Rs 258 crore. The (EOW) of the Mumbai Police is investigating alleged accounting irregularities at the lender.  

According to the reports, these entries are suspected to have been used by the private-sector bank to ‘dress up’ its accounts and boost net interest income in select quarters. The irregularities were detected by Grant Thornton India, the forensic auditor appointed by the bank earlier this year to probe the matter.

Grant Thornton’s report, submitted in April 2025, flagged manual entries aggregating Rs 255 crore that were not linked to genuine internal trades or supported by adequate documentation. These entries, the auditor said, led to an overstatement of the balance sheet and the creation of excessive assets.

“Prima facie, these appear to be ‘dress-up’ entries spread across multiple quarters to make the accounts look favourable,” a senior official aware of the investigation told ET. “The forensic auditor has pointed out that these entries were selectively used to shore up net interest income in quarters where results fell short of market expectations. We have now summoned a key management person in this regard.”

The EOW has issued summons to Subhash Maheshwari, Assistant Vice President at IndusInd Bank, to appear next week and explain the entries.

In March, IndusInd Bank disclosed that its internal review of derivative-related accounts indicated a potential hit of 2.35 per cent to its net worth as of December 2024. The lender had also reported a Rs 1,979 crore lapse in its derivatives portfolio, along with Rs 674 crore of misstatements booked as microfinance income, Rs 595 crore of “unsubstantiated balances” under other assets, and Rs 172.6 crore misclassified as fee income.

The ongoing probe has revealed that several key managerial personnel (KMPs) were aware of the controversial derivative trades since 2023 but allegedly overlooked the lapses. The police have already questioned former CFO Govind Jain, ex-CEO Sumant Kathpalia, and former Deputy CEO Arun Khurana in connection with the case.