SFIO Investigates IndusInd Bank Over Delays in 2024 Forensic Audit Report Submission

IndusInd Bank Under Scrutiny as SFIO Probes Delayed Forensic Audit Report

India's fraud investigation agency, the Serious Fraud Investigation Office (SFIO), is questioning several officials of IndusInd Bank over the delayed presentation of a forensic audit report by PwC to the bank's board. The agency has sought information from the bank and its employees to determine the reasons behind the delay in conducting and concluding the forensic audit.

The probe centers on whether PwC received sufficient cooperation from bank employees and if some executives and board members deliberately delayed the report's presentation to the board. The investigating officer has requested several audio and email trails to verify if employees of the bank, past or present, and/or any board member played a role in delaying the presentation of the forensic audit report.

Timeline of Events

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• June 2024: PwC was engaged by IndusInd Bank to conduct a detailed forensic audit on its treasury position and ascertain the resultant impact on the bank's financials.
• June 2024: PwC was supposed to have furnished a draft report to the board within six weeks from the date of signing the engagement letter or by end of September 2024.
• Early March 2025: The audit commenced, and the report was placed before the board in April 2025.
• March 10, 2025: The bank revealed discrepancies in treasury-related accounting, which could impact its net worth by 2.27 percent.

The investigation is also looking into whether RBI's involvement in the matter in early March 2025 prompted the bank to cooperate with PwC. The treasury function was directly under the supervision of Arun Khurana, the bank's former Deputy CEO and whole-time director, who stepped down on April 28, 2025. A day later, the bank's then MD & CEO, Sumant Kathpalia, also resigned from the bank for the same reason.

People Being Probed

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The probe on the forensic audit-related aspect is centered around the finance and accounts teams of the bank. Certain key former executives in the treasury department, including Siddharth Banerjee (head of global markets group) and the bank's former HR head, Zubin Mody, have been questioned in this regard. Among the board members, Bhavna Doshi, head of IndusInd Bank's audit committee, is also likely to be questioned to ascertain the reasons for the delay in concluding the forensic audit.

The investigation has suggested that Sumant Kathpalia may not have played a role in delaying the audit proceedings or presenting the report to the board. However, the investigation is still ongoing, and the cause of the delay in concluding the audit and the persons responsible for this remain to be determined.