ICAI to Review IndusInd Bank's Financial Statements

In a significant development, the Institute of Chartered Accountants of India (ICAI) is poised to examine the financial statements of IndusInd Bank. This move comes in the wake of revelations about accounting discrepancies estimated at a staggering Rs 2,100 crore. The private sector lender disclosed these discrepancies on March 10, highlighting potential adverse impacts on the bank's financial health.

The discrepancies were identified in the bank's derivatives portfolio, with internal reviews suggesting a potential impact of about 2.35% on the bank's net worth as of December 2024. In response, the Financial Reporting Review Board (FRRB) of ICAI is likely to undertake a detailed review of the bank's financial statements to ensure compliance with accounting standards and regulations.

Implications for IndusInd Bank

This review by the FRRB is part of a broader effort to assess compliance with the Accounting Standards, Standards on Auditing, and other regulatory requirements under the Companies Act, 2013. Additionally, the review will evaluate adherence to various guidance notes on accounting and auditing, along with directives issued by the Reserve Bank of India (RBI).

IndusInd Bank has acknowledged the accounting lapse, noting that it was first identified between September and October of the previous year. The bank has since provided a preliminary update to the RBI, with the final figures expected to be disclosed following the completion of an external agency's report by early April.