IndusInd Bank is once again under the spotlight as it initiates a second forensic audit—this time with global consulting firm Ernst & Young (EY). This new probe aims to uncover a ₹600 crore gap in accrued interest income from the bank’s microfinance portfolio. This comes just weeks after the first forensic audit was launched to investigate issues related to forex derivative transactions.
The IndusInd Bank second audit raises fresh concerns about governance and internal control lapses, which are now worrying investors and shaking market confidence.
What Is the Second Audit About?
The new audit conducted by EY will focus on three main areas—operational lapses, potential frauds, and fixing accountability for the missing ₹600 crore in accrued interest. This issue has surfaced within the bank’s microfinance lending segment, which caters primarily to small borrowers, often in rural and semi-urban areas.
This is not a routine review. The appointment of a top firm like EY for a forensic audit suggests serious internal issues that need a deep dive.
Ongoing Parallel Audit for Forex Derivatives
Interestingly, this IndusInd Bank second audit is not the only one running right now. An earlier investigation by Grant Thornton is already underway to examine irregularities in the bank’s forex derivatives accounting.
The issue became public in March 2025, when the bank disclosed a potential ₹1,600 crore loss linked to forex derivative exposures. But soon after, PwC conducted a review and pegged the possible loss even higher—at ₹1,979 crore, or around 3.1% of the bank’s net worth.
The PwC report, however, included several disclaimers, indicating that the full picture might still be unclear.
Stock Market Reaction: A Rollercoaster Ride
The news of the IndusInd Bank second audit didn’t go down well with the market. On April 22, 2025, the bank’s shares fell 6% to ₹776. This added to the pressure the stock has faced ever since the forex issue came to light in March.
In total, the stock has now fallen by about 11% since March 10. What’s more surprising is that just before the EY audit news broke, the shares had seen a 16% rally over five sessions. Investors were reacting positively to the bank’s corrective steps, but the new audit has wiped out those gains.
This kind of volatility suggests that investors are still nervous and looking for reassurance about the bank’s internal systems and governance.
IndusInd Bank Share Price Fall: Massive Stock Crash Raises Investor Concerns
Leadership Shakeup Before Q4 Results
In the midst of all this, IndusInd Bank has also made a key leadership change. Santosh Kumar has been promoted to the role of Deputy CFO, replacing interim CFO Arun Khurana. This move comes just ahead of the bank’s Q4 results and is being seen as part of a broader effort to restore investor confidence.
What Does This Mean Going Forward?
The launch of the IndusInd Bank second audit sends a clear message—the bank is trying to fix the gaps and rebuild trust. However, with two forensic audits underway and large loss estimates still hovering over its books, investor sentiment remains cautious.
The microfinance segment is a crucial part of the bank’s business model. If operational flaws or frauds are confirmed, it could have longer-term implications not just financially, but also reputationally.
Conclusion
With two separate forensic audits, a major leadership reshuffle, and fluctuating market reactions, IndusInd Bank finds itself in a challenging phase. The IndusInd Bank second audit led by EY will play a crucial role in determining how deep the issues go—and how soon the bank can move past them.
Until the audit results are out and further clarity emerges, the cloud of uncertainty is likely to linger. For now, all eyes are on the bank’s next financial disclosures and how it handles the multiple crises unfolding.
