In a startling development, IndusInd Bank 's former Chief Financial Officer (CFO) has taken his concerns to the highest level of government, alleging serious irregularities in the bank's operations and calling for the removal of the board chairman.

Whistleblower's Allegations

The ex-CFO, Mr. Jain, has written directly to the Prime Minister, seeking the removal of board chairman Mehta. In his letter, Jain claims to have uncovered significant issues in the bank's treasury operations that have persisted for over a decade. He alleges that upon exposing these problems, he faced retaliation from Mehta and associates, who allegedly created an atmosphere of fear within the organization.

Bank's Response

IndusInd Bank has categorically denied all allegations made by the former CFO. The bank stated that its board had already disclosed accounting discrepancies in derivatives and microfinance to the stock exchanges. Furthermore, the bank appointed external investigators and reported suspected frauds to regulators, emphasizing its commitment to transparency and regulatory compliance.

Financial Implications

The gravity of the situation became apparent when IndusInd Bank reported suspected frauds that led to a substantial quarterly loss of Rs 2000.00 crore. Auditors flagged Rs 2600.00 crore worth of accounting discrepancies, including:

• Inflated microfinance income
• Rs 1960.00 crore of notional profits from derivative trades

This revelation had a significant impact on the bank's stock, causing a sharp 27.00% plunge in its value.

Management Changes and Internal Investigations

Following internal investigations that revealed senior officials had overridden financial controls, then-CEO Sumanth Kathpalia stepped down from his position. This move underscores the seriousness of the allegations and the bank's response to the uncovered issues.

Call for Further Action

Mr. Jain has not only sought the removal of Chairman Mehta but has also requested government intervention for an independent probe. He alleges that auditors produced reports dictated by the board, raising questions about the integrity of the audit process.

Conclusion

As this situation unfolds, it highlights the critical importance of robust financial controls, transparent corporate governance, and the role of whistleblowers in the banking sector. The outcome of this case could have far-reaching implications for IndusInd Bank and potentially for the broader financial industry in India.

Investors and stakeholders will be closely watching how regulatory bodies respond to these allegations and what steps IndusInd Bank takes to address these serious concerns and restore confidence in its operations and management.

IndusInd Bank , a prominent player in the Indian banking sector, has announced the appointment of Pragati Gondhalekar as its new Head of Internal Audit, effective September 1, 2025. This strategic move comes as part of the bank's efforts to strengthen its leadership team and address recent accounting challenges.

New Appointment and Professional Background

Pragati Gondhalekar brings a wealth of experience to her new role, with over 27 years in global audit and consulting within the financial services sector. Her impressive career includes serving as the Country Head for Group Audit at Deutsche Bank in India and holding leadership positions at L&T Financial Services and PwC.

Gondhalekar's expertise spans:

• Strategic audit leadership
• Regulatory compliance
• Risk management
• Digital transformation
• Board governance

Her qualifications include:

• Chartered Accountant from India and Canada
• Certified Internal Auditor (CIA)
• Certified Public Accountant (CPA) from the USA

Management Reshuffle and Recent Challenges

The appointment of Gondhalekar is part of a broader management reshuffle at IndusInd Bank. Recently, shareholders approved Rajiv Anand as the new CEO and Managing Director for a three-year term. The bank is actively working to fill other key management positions, including the roles of treasury head and chief financial officer, which are currently vacant due to resignations and retirements.

This leadership transition follows a challenging period for IndusInd Bank:

• In March, the bank disclosed a Rs 2,000-crore loss linked to derivatives accounting.
• This led to the departure of managing director Sumant Kathpalia and deputy CEO Arun Khurana in April.
• The bank uncovered accounting issues in its microfinance portfolio, resulting in its largest quarterly loss of Rs 2,329 crore in March.

Financial Recovery

Despite these setbacks, IndusInd Bank has shown signs of recovery. In the June quarter, the bank returned to profitability, reporting a net profit of Rs 604 crore after adjusting for one-time charges. This turnaround demonstrates the bank's resilience and its efforts to address the accounting challenges it faced earlier in the year.

The appointment of Pragati Gondhalekar as Head of Internal Audit is expected to play a crucial role in strengthening the bank's internal controls and financial reporting processes. Her extensive experience in audit and risk management is likely to be instrumental in preventing future accounting discrepancies and ensuring robust financial governance.

As IndusInd Bank continues to navigate through this period of transition and recovery, the new leadership appointments and focus on strengthening internal processes signal the bank's commitment to regaining stakeholder trust and maintaining its position in the competitive Indian banking landscape.