IndusInd Bank's Derivative Dilemma: Accounting Lapses Uncovered

IndusInd Bank has reported a negative impact of Rs 1,979 crore on its net worth due to accounting discrepancies in its derivative portfolio. The bank has engaged PwC and Grant Thornton to assess and audit the situation, while IndusInd International Holdings Ltd has pledged capital support if needed.

IndusInd Bank disclosed a significant accounting lapse in its derivative portfolio, causing a detrimental effect of Rs 1,979 crore on the institution's net worth. This revelation could potentially decrease the bank's net value by 2.27% as of December 2024.

The private sector lender has initiated an external assessment, engaging PwC to evaluate the extent of the financial impact. Following this, Grant Thornton has been tasked with a forensic audit to identify discrepancies and ensure compliance with accounting standards.

In light of the discovery, IndusInd International Holdings Ltd, the bank's Mauritius-based promoter, has expressed readiness to reinforce the bank's capital if necessary. The Reserve Bank of India has permitted IIHL to increase its stake, underscoring its commitment to the bank's stability.

(With inputs from agencies.)