IndusInd Bank has been notified that the Serious Fraud Investigation Office (SFIO) is probing its accounts for a massive fraud involving its derivatives trades and micro‑finance income.
What triggered the investigation?
The bank told the stock exchanges it received a formal letter from the SFIO on December 23, 2025, asking for information under the Companies Act. The probe follows an earlier notice on December 18, 2025, that highlighted irregularities in the bank’s internal derivative trades, unexplained balances in “Other Assets” and “Other Liabilities,” and inflated micro‑finance interest and fee income.
Key accounting problems uncovered
- Derivative trade losses: About Rs 1,960 crore of notional profits from internal trades dating back to FY‑16 were written off.
- Mis‑recorded income: Rs 673.82 crore was wrongly booked as interest income and Rs 172.58 crore as fee income over three quarters, later reversed in FY‑25 Q4.
- Fake asset/liability entries: Roughly Rs 595 crore of questionable entries in “Other Assets” and “Other Liabilities” were removed.
Financial impact
All these adjustments total around Rs 2,600 crore, representing a significant hit to the bank’s balance sheet. The discrepancies were first spotted during the March 2025 audit of the bank’s quarterly and yearly results.
Market reaction
After the filing, IndusInd Bank’s shares slipped slightly, closing at Rs 848.90 on the NSE. The stock has been under pressure since the issue was first reported and is down more than 10% over the past year.
What investors should consider
- Monitor further updates from the SFIO and the bank’s management.
- Assess the potential impact on the bank’s profitability and capital adequacy.
- Consider the broader banking sector sentiment, as similar probes can affect peer stocks.
Disclaimer
Remember, this is perspective, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.