IndusInd Bank Shares Fall as $230 Million Accounting Discrepancy Comes to Light

IndusInd Bank share price was trading at ₹816.45, reflecting a decline of ₹10.35 (-1.25%) at 10:45 AM on the NSE from the previous close of ₹826.80. The stock opened lower at ₹805.50 and touched a high of ₹823.60 during the session.

Two former executives of IndusInd Bank traded company shares while aware of internal accounting lapses that had not yet been disclosed to the public. This was revealed in a forensic review conducted by Grant Thornton, following a $230 million discrepancy in the bank’s balance sheet. The matter is now under review by regulators.

Report Flags Share Trading Linked to Undisclosed Accounting Gaps

An independent review by audit firm Grant Thornton found that former CEO Sumant Kathpalia and Deputy CEO Arun Khurana traded in IndusInd Bank shares before the bank announced accounting issues in March 2025. The review noted the possibility of these trades being examined under insider trading regulations, given the timing and access to material information.

Public records indicate that between March 2024 and the March 10, 2025 disclosure, Kathpalia sold shares worth ₹283.48 million and purchased shares worth ₹102.71 million. Khurana sold shares valued at ₹320.72 million during this period. The bank had not yet disclosed the $230 million gap linked to internal derivative trades, as per news reports.

Accounting Irregularities

The bank disclosed in March that the discrepancy was due to non-compliant internal derivative transactions, affecting about 2.35% of its net worth. According to the report, concerns were first raised by the Market Risk team as early as 2015, but the issues remained unaddressed due to manual accounting processes and limited documentation.

The review also noted instances of internal communications referencing the suppression or deletion of relevant information, though it did not publicly name individuals in those cases. The findings point to procedural weaknesses and lack of adequate internal controls over accounting practices.

Executive Resignations and Formation of Oversight Committee

In the weeks following the disclosure, Kathpalia and Khurana resigned from their positions. Kathpalia stated he was stepping down on moral grounds, while Khurana cited the overall situation. Neither offered public comments on the trading activity.

Following the resignations, the Reserve Bank of India (RBI) approved a temporary executive committee to oversee the bank’s operations. The RBI and IndusInd Bank have not issued detailed public statements about the forensic review, but the report has been shared with both the bank and the central regulator.

Conclusion

The findings from the forensic review at IndusInd Bank have raised regulatory and governance questions, particularly around internal oversight and disclosure practices. Further action may depend on the response from the Securities and Exchange Board of India (SEBI) and the RBI. The bank continues operations under interim leadership and has stated that it is working to establish accountability measures.

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