SEBI Probes IndusInd Bank Amid Suspected Fraud and Insider Trading Concerns

The Securities and Exchange Board of India (SEBI) has initiated an investigation into possible regulatory breaches in the IndusInd Bank case following revelations of suspected fraud and insider trading. This comes in the wake of significant accounting discrepancies that have prompted high-level resignations, regulatory scrutiny, and internal audits within the bank.

SEBI and RBI Step In Amid Disclosure of Irregularities

Speaking at an Assocham event, SEBI Chairman Tuhin Kanta Pandey stated, “RBI is looking into IndusInd Bank accounting discrepancies. Whatever Sebi has to do in relation to it, whatever Sebi’s remit is, Sebi is doing. It is RBI’s remit, but if there are any egregious violations by anyone in its capacity, Sebi is looking into it.”

His comments follow IndusInd Bank's recent disclosure of potential fraud involving “certain employees” responsible for accounting and financial reporting. On Thursday, the bank reported a net loss of ₹2,328.92 crore in its fiscal fourth quarter results the first set of financials released since the irregularities surfaced.

The bank's board noted during a post-earnings call that it suspects some employees involved in financial reporting may have committed fraud. Regulatory bodies, including SEBI and the RBI, are now examining the nature and extent of the discrepancies.

Financial Misreporting and Governance Concerns

According to news report, the audit department discovered on May 21 that ₹172.58 crore had been incorrectly reported as fee income in the bank’s microfinance division across three quarters ending December 2024. This misclassification was rectified in the fourth quarter, resulting in the significant loss reported by the bank.

Chairman Sunil Mehta emphasised the board’s commitment to resolving the matter, stating that the issue is being taken “very seriously.” He added that the bank is implementing measures to prevent such lapses in the future, and improving its governance culture is now a key priority.

Furthermore, Mehta informed that the board will be forwarding its recommendation for a new CEO to the Reserve Bank of India by 30 June, following the resignation of the current CEO amid the unfolding situation.

Read more: IndusInd Bank’s Promoter IIHL Says Ready to Infuse Equity if Required.

IndusInd Bank Share Performance 

As of May 23, 2025, at 2:21 PM, IndusInd Bank’s share price is trading at ₹789.50 per share, reflecting a surge of 0.57% from the previous day's closing price. Over the past month, the stock has declined by 0.59%

Conclusion

The IndusInd Bank episode has highlighted serious concerns around corporate governance and financial transparency within the Indian banking sector. With SEBI and RBI conducting thorough investigations, the bank is under pressure to restore stakeholder confidence and reinforce its internal controls.
 

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