External Auditor PwC Likely To Report IndusInd Bank's Accounting Discrepancies

IndusInd Bank's external auditor, PricewaterhouseCoopers (PwC), is set to present its report on accounting discrepancies in the bank’s derivative portfolio to the lender’s board on Friday, per sources cited by PTI. The report is expected to highlight the actual financial impact of these discrepancies, lapses at various levels, and recommend remedial actions.

Preliminary estimates indicate that the accounting lapse, amounting to Rs 2,100 crore, could affect approximately 2.35 per cent of the bank’s net worth. The Reserve Bank of India (RBI) has directed the bank’s board and management to implement corrective measures within the ongoing quarter, ensuring full disclosure to stakeholders before the quarter ends on March 31.

PwC audits IndusInd discrepancies

In response to the issue, IndusInd Bank has engaged Grant Thornton to conduct a forensic audit to determine the root cause of the discrepancies, evaluate compliance with accounting standards, and identify any accountability lapses in the treatment of derivative contracts.

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On March 10, the bank disclosed certain irregularities in its derivatives portfolio, prompting global rating agency Moody’s to place IndusInd Bank’s Baseline Credit Assessment (BCA) under review for a potential downgrade. The agency placed the bank’s Ba1 BCA and adjusted BCA under scrutiny, assessing the financial health of the institution independently of external support.

Despite the accounting setback, IIHL Chairman Ashok Hinduja confirmed that IndusInd Bank, has not sought fresh capital from its promoters. IIHL, the investment arm of the Hinduja Group, recently secured RBI’s in-principle approval to increase its stake in the bank from 16 to 26 per cent. Hinduja assured that IIHL, the Mauritius-based promoter entity, remains committed to infusing capital into the bank if necessary.