IndusInd Bank: ICAI may look into bank’s financial statements following accounting crisis

The Institute of Legal Accountants in India (ICAI) is likely to review the books of Indusind after accounting contradictions reported by the bank in its derivative portfolio earlier this week. “As a proactive procedure, the Financial Reports Review Board (FRB) for ICAI can review the relevant financial statements for Indusind,” ICAI CHAranjot Singh Nanda told the Economic Times.

Nanda stated that in the event that the FRB is determined that the bank’s financial statements do not meet the criteria required for being “real and fair”, they have the authority to escalate the matter to the ICAI disciplinary committee to take possible measures against the relevant auditors.

On Monday, Bank Indusind stated that the contradictions in its derivative wallet may lead to a decrease of approximately 2.35 % in its net wealth from December 2024. The financial impact is estimated at about 1,600 rupees after taxes and about 2100 rupees before taxes.

These contradictions were discovered during an internal review of the bank’s operations regarding other assets and responsibility accounts in a derivative portfolio. These transactions spanned seven to eight years until the end of the 24th year.

Today’s business cannot check the report with ICAI.

Indusind Bank attempted to address fears of accounting contradiction on Tuesday, reassuring investors that he had sufficient reserves and capital to address this issue. Nevertheless, the stock has decreased by almost 30 % since the announcement, causing anxiety among investors.

Indusind Bank shares are placed under an additional short -term surveillance scale (ASM) – stage 1 by NSE due to a decrease of approximately 30 % in its market value. The decision was made on March 13.

As of Thursday, Indusind Bank shares were closed at 672.65 rupees on NSE, which reflects a decrease of 12.05 rupees or 1.76 %.

Stock classifications

After the revelation, many brokerage firms reduced their classification on stocks and reduced targeted prices due to an accounting error in the bank’s Forex derivative portfolio. This has led to a possible post -tax impact of 15.8 billion rupees, which is 2.35 % of the net net value of the bank, which raised concerns about governance and the ability to predict profit.

ICici Securities highlights weak internal controls, saying that the influence is expected to affect the statement of profit and loss, which may lead to a loss in the fourth quarter of the fiscal year 2025.

NUVAMA has also reduced its classification on Indusind from “Hold” to “Reducing” and reducing its target price to 750 rupees due to the problems of credibility resulting from the various negative events, such as the resignation of the financial manager, the expansion of the abbreviated executive, and the reduction of Forex derivatives. Mediation expects the challenges of continuous profits.

On the contrary, CLSA, a global mediation company, has taken a different point of view, while maintaining the “Outperform” classification and setting a 900 -header targeted price, which is 31 % higher than the closing price the day before.