Indusind Bank , one of India's leading private sector banks, has seen a significant increase in directors' sitting fees. This surge comes in the wake of a derivatives portfolio discrepancy disclosed on March 10, which led to a substantial increase in board meetings and oversight activities.

Sharp Rise in Directors' Compensation

The bank's directors have received notably higher sitting fees, primarily due to the increased frequency of board meetings following the derivatives portfolio issue. Here's a breakdown of the changes in compensation for key board members:

Surge in Board Meetings

IndusInd Bank witnessed a dramatic increase in the number of meetings held between March and August, with 180-200 meetings taking place during this period. This is a stark contrast to the significantly fewer meetings held during the same timeframe in the previous year. The total number of board meetings rose to 31, up from 21 in the previous year.

Committee Activities

Among the various committees, the risk management committee saw the most pronounced increase in activity:

• Risk Management Committee meetings increased from 5 to 14

Compensation Structure

IndusInd Bank's compensation structure for board meetings is as follows:

• ₹1 lakh per board meeting
• ₹75,000 per committee meeting

Reasons for Increased Oversight

The bank attributed the need for increased oversight to two main factors:

1. The exit of key managerial personnel
2. Regulatory direction to establish a board oversight committee

These circumstances necessitated more frequent meetings and closer monitoring of the bank's operations, particularly in light of the derivatives portfolio discrepancies.

The significant increase in directors' compensation reflects the heightened responsibilities and time commitment required to navigate the bank through this challenging period. As IndusInd Bank works to address the issues surrounding its derivatives portfolio, the increased board engagement demonstrates a commitment to strengthening governance and risk management practices.

IndusInd Bank , one of India's leading private sector banks, finds itself embroiled in a controversy as the Mumbai Police's Economic Offences Wing (EOW) investigates an alleged ₹1,979 crore accounting error in the bank's derivative portfolio. The case has drawn significant attention, causing a sharp decline in the bank's stock price and raising questions about its financial practices.

Investigation Underway

The EOW recently questioned IndusInd Bank's Chief Financial Officer (CFO), Gobind Jain, regarding the substantial accounting discrepancy. Jain, who claims to be a whistle-blower in this case, has submitted supporting documents to the authorities and is scheduled to reappear for further questioning on Thursday.

The investigation has widened its scope, with the agency also summoning former executives Arun Khurana and Sumant Kathpalia for questioning. This move suggests that the EOW is looking into the roles and responsibilities of both current and past leadership in relation to the accounting error.

Impact on Stock Performance

The revelation of this accounting error, which first came to light in April, has had a significant impact on IndusInd Bank's market performance. The bank's stock plummeted by 25%, erasing ₹15,000 crore in market value. This sharp decline underscores the severity of the issue and its potential implications for investor confidence.

Timeline and Audit Findings

One of the key aspects under scrutiny is the timeline of the accounting error. Investigators are examining why the issue, which reportedly began in 2015, took nearly a decade to surface. This extended period raises questions about the bank's internal controls and financial reporting processes.

The EOW has requested the Grant Thornton audit report, which has identified lapses by 25 employees. These employees have subsequently been suspended, indicating the bank's initial response to address the situation internally.

Ongoing Inquiry

The preliminary inquiry is based on a complaint from the bank's management, suggesting that the current leadership is cooperating with the authorities to resolve the matter. As the investigation progresses, it is expected to shed light on the exact nature of the accounting error, its causes, and potential remedial measures.

Looking Ahead

While the investigation is ongoing, it's important to note that IndusInd Bank continues its operations. According to recent LODR (Listing Obligations and Disclosure Requirements) data, the bank has been making organizational changes. The bank's Board of Directors approved the appointment of Mr. Viral Damania as the new Chief Financial Officer and Key Managerial Personnel, effective from September 22, 2025.

As the situation unfolds, stakeholders, including investors, regulators, and customers, will be closely watching the developments at IndusInd Bank. The outcome of this investigation could have significant implications for the bank's reputation, governance practices, and future financial performance.

The bank's management and board will likely face pressure to enhance transparency, strengthen internal controls, and restore investor confidence in the wake of this controversy. As the investigation proceeds, more details are expected to emerge, providing a clearer picture of the accounting discrepancy and its potential long-term impact on IndusInd Bank.