IndusInd Bank Faces Accounting Discrepancy Crisis Amid Derivatives Portfolio Investigation

IndusInd Bank has appointed a professional firm to investigate discrepancies in its derivatives portfolio accounting, which may affect its net worth by 2.35%. The board seeks to establish accountability and ensure compliance with accounting standards. Moody's has placed IndusInd's credit rating under review for possible downgrade.

IndusInd Bank has taken decisive action by appointing an independent firm to investigate significant discrepancies in its derivatives portfolio accounting. These discrepancies, estimated at Rs 2,100 crore, could potentially affect 2.35% of the Bank's net worth.

The decision, made during a board meeting on Thursday, involves a comprehensive probe to identify the root cause and assess compliance with accounting standards. The investigation will also establish any lapses and hold relevant parties accountable.

In light of these developments, Moody's has placed IndusInd Bank's baseline credit assessment under review for a possible downgrade, reflecting concerns over its standalone financial health. Despite the issues, IIHL, the bank's Mauritius-based promoter, has pledged to provide capital if required.

(With inputs from agencies.)