Fri May 16 05:40:00 UTC 2025: Okay, here’s a summary and a news article based on the provided text:
**Summary:**
IndusInd Bank is facing increased scrutiny after revealing additional accounting irregularities identified in internal audits. These include incorrectly recorded interest income in its microfinance book and unsubstantiated balances in its ‘other assets’ account. These issues, combined with earlier discrepancies in its derivatives portfolio, have led to downgrades from major brokerage firms (CLSA, Investec, Kotak), lowered profit outlooks, and negative ratings actions from Crisil and Moody’s. The accounting irregularities resulted in a substantial financial hit of ₹1,960 crore. These events have also resulted in the resignations of the bank’s CEO and deputy CEO.
**News Article:**
**IndusInd Bank Stock Plummets as Accounting Woes Deepen**
**Mumbai:** Shares of IndusInd Bank are under pressure following the disclosure of further accounting irregularities, prompting brokerages to downgrade their recommendations and raising concerns about the lender’s financial health.
The bank revealed on Thursday that an internal audit uncovered ₹674 crore in incorrectly recorded interest income within its microfinance portfolio and ₹595 crore in unsubstantiated balances within its ‘other assets’ account. While IndusInd Bank claims these discrepancies have been addressed and reversed, the revelations have shaken investor confidence.
This latest news comes on the heels of a previous announcement regarding discrepancies worth about ₹1,530 crore in its derivatives account balances, bringing the total financial hit to ₹1,960 crore for fiscal 2024-25.
The accounting issues have triggered a wave of negative reactions from financial institutions. CLSA downgraded IndusInd Bank’s stock to “hold” and lowered its target price, citing a significant reduction in expected net interest margin. Investec went further, downgrading the stock to “sell,” expressing caution amidst “heightened uncertainty” and anticipating structural impairment in profitability. Kotak Institutional Equities has also lowered earnings outlook for the bank.
The negative sentiment is reflected in the bank’s stock price, which has fallen over 15% since mid-March. On Friday, the stock traded down about 2% at ₹764.30 per share.
Credit rating agencies are also taking a cautious stance. Crisil has placed IndusInd Bank’s long-term debt instruments on “rating watch with negative implications,” while Moody’s is reviewing the bank’s baseline credit assessment for a potential downgrade.
The fallout from the accounting issues has already claimed the jobs of IndusInd Bank’s CEO Sumant Kathpalia and deputy CEO Arun Khurana, who resigned in April. The bank initiated forensic and accounting reviews in the wake of initial disclosures. The forensic audit was conducted by Grant Thornton and the accounting review of its derivatives portfolio by PwC.
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