J Sridharan, Executive Vice Chairman of Bharat Financial Inclusion Ltd (BFIL), has resigned after more than 16 years with the microfinance arm of IndusInd Bank. 2 other officials working on loan data have also exited, according to the NDTV Profit reports. The departures come as the bank deals with ongoing internal investigations into accounting issues in its microfinance portfolio.
The bank identified that several microfinance accounts had been incorrectly tagged as standard assets. These accounts were later moved to the non-performing asset (NPA) category. IndusInd Bank said it has made provisions covering 95% of these loans, which led to a financial impact of ₹1,969.2 crore.
As per the news reports, during the earnings call held after its March quarter results, Non-Executive Chairman Sunil Mehta said the bank had wrongly recorded interest and fee income over the first 3 quarters of FY25. These entries were reversed in January. The internal audit team found discrepancies amounting to ₹172.58 crore in interest income.
The reversal, along with an interim provision of ₹322.43 crore, resulted in a further negative impact of ₹422.36 crore for the quarter ending March 2025.
The bank stated that internal controls were overridden by senior and former executives. It also found that details of certain transactions were not disclosed to the board or statutory auditors. Derivative transactions from FY16 to FY24 were found to be inconsistent with accounting standards.
Read more: IndusInd Bank to Realign Senior Management Roles After Accounting Review!
Managing Director and CEO Sumant Kathpalia and Deputy CEO Arun Khurana resigned in April. CFO Gobind Jain had stepped down in January. The board is in the final stages of identifying CEO candidates and plans to send the shortlisted names to the Reserve Bank of India before the June 30 deadline.
As of 09:22 AM on May 27, 2025, IndusInd Bank share price was trading at ₹805.35, a 0.66% increase, with a 20.08% decline over the past 6 months and a 45.35% decrease over the past year.
IndusInd Bank is dealing with the fallout from years of accounting lapses and internal control failures. Several senior executives have stepped down, and the bank is now in the middle of leadership changes and ongoing investigations.
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Published on: May 27, 2025, 3:21 PM IST
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