PwC Likely To Submit Report To IndusInd Bank Board On Accounting Discrepancies This Week: Report

The RBI earlier instructed the bank’s board and management to implement remedial actions within the current quarter, ensuring that necessary disclosures were made to stakeholders before March end.

The estimated Rs 2,100 crore accounting discrepancy could affect 2.35 per cent of the bank’s net worth.

Source : Justdial

External auditor PwC is expected to present its report to IndusInd Bank’s board on Friday regarding discrepancies in its derivatives portfolio, media reports said. The estimated Rs 2,100 crore accounting discrepancy could affect 2.35 per cent of the bank’s net worth.

Citing sources in the know, PTI reported that the submission from the auditor is anticipated to detail the actual financial impact of these irregularities, identify lapses at multiple levels, and recommend corrective measures.

The Reserve Bank of India (RBI) earlier instructed the bank’s board and management to implement remedial actions within the current quarter, ensuring that necessary disclosures were made to stakeholders before the quarter ended on March 31.

Forensic Audit and Regulatory Scrutiny

Alongside PwC’s assessment, IndusInd Bank’s board engaged Grant Thornton to conduct a forensic audit of the identified accounting lapses. The firm was tasked with investigating the root causes of these discrepancies and evaluating whether the accounting treatment of the derivative contracts adhered to the prevailing accounting standards. Additionally, the audit aimed to identify any failures in compliance and determine accountability for the irregularities.

On March 10, the bank publicly disclosed certain discrepancies in account balances related to its derivatives portfolio. Following this announcement, global rating agency Moody’s placed IndusInd Bank’s Baseline Credit Assessment (BCA) under review for a potential downgrade. Moody’s reviewed IndusInd’s Ba1 BCA and adjusted BCA, which evaluate the bank’s financial health independently of external support.

Last week, IIHL chairman Ashok Hinduja clarified that IndusInd Bank has not requested additional capital from its promoters, despite a significant impact on its net worth due to the accounting discrepancy. IIHL, the Hinduja Group’s investment arm, recently received in-principle approval from RBI to raise its stake in IndusInd Bank from 16 per cent to 26 per cent.

Hinduja further stated that IndusInd International Holdings Ltd (IIHL), the Mauritius-based promoter entity, remained committed to infusing capital into the bank if necessary.