In a development that has sent shockwaves through the banking and investor community, IndusInd Bank shares plunged 6% on April 22, trading at Rs 776 apiece, following reports of a second forensic audit into financial discrepancies.

This fresh turmoil arises from a Rs 600 crore discrepancy related to accrued interest income from the bank’s microfinance portfolio—a crucial segment of its overall lending business. The bank’s board has reportedly appointed global audit firm Ernst & Young (EY) to conduct a detailed investigation into the matter.

Second Audit Raises Concerns

What makes this development more concerning is that this is not the only audit currently underway at IndusInd Bank. The latest probe by EY will run parallel to an ongoing investigation by Grant Thornton Bharat (GTB). GTB is already examining irregularities in the accounting of the bank’s forex derivatives portfolio.

The decision to bring in EY for a second audit points to deepening concerns within the bank’s management and the need to thoroughly address the growing scrutiny around its financial practices.

EY to Investigate Operational Lapses and Fraud

The mandate given to Ernst & Young is extensive. The firm is expected to:

Examine the operational lapses that may have led to the discrepancy.
Identify any potential instances of fraud.
Pinpoint the departments or individuals responsible for the errors in financial reporting.

This move signals the bank’s attempt to regain stakeholder trust by ensuring accountability and transparency during a sensitive time.