IndusInd Bank’s shares slumped nearly 6% on Friday, falling 5.68% to Rs 735.95 on the BSE and 3.90% to Rs 750 on the NSE, after the bank disclosed “unsubstantiated balances” of Rs 595 crore in its balance sheet’s “other assets.”

The Internal Audit Department (IAD) reported on May 8, following a whistleblower complaint, that these balances were offset against corresponding “other liabilities” in January 2025, raising concerns about financial oversight.

The IAD’s investigation, directed by the Audit Committee, reviewed transactions in “other assets” and “other liabilities” accounts and scrutinized the roles of key employees involved.

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This probe follows an earlier April 22 disclosure, where the bank announced a review of its microfinance (MFI) business due to unspecified concerns, with EY enlisted to support the IAD’s efforts. The bank also identified Rs 674 crore in incorrectly recorded interest, further denting investor confidence.

IndusInd’s board committed to strengthening internal controls, enhancing oversight mechanisms, and holding accountable those responsible for the lapses. The bank emphasized that corrective measures are being implemented to prevent future discrepancies.

Despite its robust financial metrics, including a 16.46% Capital Adequacy Ratio and 70.20% Provision Coverage as of March 2025, the recurring accounting issues have sparked concerns about governance.

The episode underscores the critical need for transparency in India’s banking sector, with IndusInd’s leadership now tasked with rebuilding trust amid heightened regulatory scrutiny.

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