The Institute of Chartered Accountants of India — the apex body of the country’s chartered accountants — may review the financial statements of IndusInd Bank, which has disclosed discrepancies in the accounting of derivatives that analysts estimate at ₹2,100 crore.
On March 10, the private sector lender had disclosed to the stock exchanges discrepancies in its derivatives portfolio, which could have an adverse impact of about 2.35 per cent of the bank’s net worth as of December 2024, according to its internal review.
The bank is expected to take the hit in its bottomline with analysts estimating accumulated losses at ₹2,100 crore pre-tax and ₹1,580 crore post-tax.
Against this backdrop, the Financial Reporting Review Board (FRRB) of the ICAI is likely to review the financial statements of the bank.
ICAI president Charanjot Singh Nanda told PTI that as a proactive measure, the ICAI-FRRB may undertake a review of the financial statements of IndusInd Bank.
FRRB conducts the review of financial statements of companies to assess compliance with accounting standards, standards on auditing, and schedules II and III of the Companies Act, 2013, among others.
FRRB also assesses compliance with various guidance notes on accounting and auditing, and master circulars/ directions issued by the Reserve Bank of India (RBI).
Chartered accountants do most of the audit work.
IndusInd Bank had also said the accounting lapse was noted around September-October last year and the bank gave a preliminary update to the RBI about it this last week.
The bank’s management has expressed confidence that profitability and capital adequacy remain healthy to absorb this one-time impact.
The final figure will be known after the external agency, which the bank has appointed, finalises its report by early April.