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IndusInd Bank Forensic Audit by Grant Thornton

24 March 20251 min read
BANKING & FINANCEIndusInd BankForensic Audit byGrant Thornton24 March 2025safalsetu.com

Why in the news

A $63 billion private lender, fifth-largest in India, sought an outside probe after admitting errors in valuing derivatives.

Key facts

  • Disclosure date: March 10; derivatives book overvalued by 2.35% (about $175 million) due to noncompliant internal trades.
  • The lapse violated RBI guidelines, yet RBI said the bank stays well-capitalised.
  • Share price: down 23.4% since the disclosure.

Scope of the forensic review

  • Find the root cause.
  • Look for fraud and intentional misstatements.
  • Review accounting of all derivative contracts.
  • Fix accountability.

Regulatory pressure

  • Reuters reported RBI asked the CEO and deputy CEO to step down once replacements are found.
  • The bank called the claim ‘factually incorrect’.

Exam angle

  • Auditor named: Grant Thornton.

Test yourself

1. Which firm did IndusInd Bank appoint to conduct a forensic review of its accounting lapses?

The bank appointed Grant Thornton.

2. By what percentage was IndusInd Bank's derivatives portfolio overvalued, as disclosed on March 10?

The portfolio was overvalued by 2.35%, about $175 million.

3. What did RBI confirm about IndusInd Bank despite the guideline violation?

RBI confirmed the bank remains well-capitalised.