IndusInd Bank has revealed a major internal fraud amounting to ₹172.58 crore, which went undetected for three consecutive quarters during the financial year 2024-25. The scam, which involved misreporting this amount as “fee income,” has led to the bank posting its first quarterly loss in 18 years.
According to an official exchange filing, the bank’s Internal Audit Department (IAD) submitted its report on May 20, 2025, uncovering that ₹172.58 crore was incorrectly recorded as fee income across the three quarters ending December 31, 2024. The discrepancy was rectified in the fourth quarter of FY 2024-25, impacting the bank’s financial statements and resulting in a rare quarterly loss.
The fraud came to light after a joint investigation by the bank’s internal audit team and an external professional agency. IndusInd Bank suspects the direct involvement of certain employees who deliberately manipulated accounting records to conceal the irregularities.
This is not the first time the bank has faced such issues. In March 2025, IndusInd Bank acknowledged accounting lapses in its derivatives portfolio, which reportedly affected its net worth by up to 2.35%. Following this, the bank appointed PricewaterhouseCoopers (PwC) to conduct a thorough analysis. PwC’s findings revealed that, as of June 30, 2024, the total impact of these irregularities amounted to ₹1,979 crore.
The crisis has triggered a leadership shakeup, with CEO Sumant Kathpalia and Deputy CEO Arun Khurana resigning on April 29, 2025. The board has since formed an executive committee to oversee operations until a new MD & CEO is appointed.
Further audits also revealed ₹595 crore in unsubstantiated balances under “Other Assets” and ₹674 crore in misreported interest income within the microfinance portfolio.
The bank is currently cooperating with regulatory authorities and has pledged to strengthen its internal controls to prevent similar incidents in the future.
