NFRA Issues Notice to IndusInd Bank Auditors Over Audit Lapses

The National Financial Reporting Authority (NFRA), India’s accounting and auditing standards regulator has served notice to the existing and former auditors of IndusInd asking details related to the lender’s audit.

As per Economic Times news sources, “Since there have been accounting irregularities in the IndusInd derivatives book over a period of time, NFRA has asked for the entire audit files for respective years from all the statutory auditors who had signed the accounts since 2017“.

The sources said that the NFRA will analyze the reports and evidence to support the audit exercise and corroborate the bank’s claims on its financials.

Recently, SEBI report revealed that the management of IndusInd Bank was aware of the derivatives discrepancies 15 months before they were disclosed. On September 26, 2023, the lender had noticed the incorrect accounting treatment of Derivative Contracts.

The bank, as per the Reserve Bank of India’s (RBI) master direction, created an inter-department team in which the derivatives discrepancies were revealed. The exact numbers were revealed by the bank on March 10, 2025.

The CEO of the bank has taken moral responsibility and stepped down. As per RBI Governor Sanjay Malhotra, this was a good step. He told in latest MPC meeting on June 6, that this issue will settle down soon and poses no systemic risk to the banking sector.

The Bank has disclosed a Rs 1,529 crore impact from these discrepancies in March 2025.

A forensic investigation by Grant Thornton made a shocking revelation that the executives were aware of these issues as early as December 2023, but delayed public disclosure.