Bank officials were studying the draft findings and may share their observations with PwC, said the people. The officials also met the firm’s consultants some time ago.
The IndusInd management had hired PwC in October 2024 to review the accounting of the portfolio after it first discovered discrepancies in the booking of its forex derivatives transactions.
The draft report, however, has stuck to a limited accounting review and has not assigned responsibility or examined the timing and history of the discrepancies, as these were outside the scope of its mandate, the source added.
This comes at a time when Grant Thornton Bharat has already begun a forensic investigation to identify the root cause of bank’s mark-to-market derivative losses, uncover lapses, and fix accountability.Replying to ET’s questionnaire, IndusInd Bank said it has not received the report from external agencies conducting the review.
Impact of Rs 1,600 crore
Bank analysts have estimated that the discrepancies will impact the bank’s net worth by Rs 1,600 crore – higher than Rs 1,401 crore net profit earned in the quarter ending December 2024.
On March 10, during a call with analysts after the bank’s disclosure to the bourses, IndusInd MD and CEO Sumanth Kathpalia said the bank has launched an internal review of a portion of its derivative portfolio after discovering discrepancies in account balances.
The bank informed exchanges that it estimates discrepancies could result in a financial impact of approximately 2.35% of its net worth as of December 2024.
The next day, the bank’s stock fell 27%–the largest single-day fall–and is down 55% in a year. On Friday, IndusInd closed at Rs 693 a share, up 2.1% over the previous day.
The bank lost its position as India’s fifth most valued lender and now ranks behind even IDBI Bank and Yes Bank on the seventh rung of the market-capitalization leaderboard.
In less than a week of the disclosures, on March 15, the RBI issued a statement assuring depositors that the private lender remains well-capitalised and that its financial health is stable.
A statement from the regulator, which is very rare, said the bank has already engaged an external audit team to comprehensively review its current systems.
It directed the bank to complete the remedial action within the March quarter “after making required disclosures to all stakeholders”.
Earlier in 2024, IndusInd Bank had also hired KPMG and EY for a few months to assist internal teams with a review of its treasury policies, procedures, and accounting processes-including those related to forex derivative contracts, ET first reported on April 4.
