The Economic Offences Wing (EOW) of Mumbai Police has initiated a Preliminary Enquiry (PE) into alleged irregularities involving IndusInd Bank. The move comes after the bank wrote to the police, requesting a probe into certain former Key Managerial Personnel (KMPs) over suspected financial discrepancies.
Officials clarified that this is currently only a PE, meaning no FIR has been registered yet. Generally, an FIR is lodged only if the inquiry establishes evidence of a cognisable offence; otherwise, the case is closed for lack of proof.
According to sources, the EOW has already recorded statements of the bank’s former CFO’s staff as well as employees from the accounts department. In March this year, the bank admitted to accounting discrepancies worth ₹1,979 crore in its derivatives portfolio.
The internal audit also revealed that ₹674 crore was wrongly recorded as interest income from the microfinance business, while ₹595 crore was shown without basis under “Other Assets” in the balance sheet.
A senior police officer stated that the inquiry is focused on two key issues — first, why these “notional profits” were reflected in the balance sheet; and second, whether certain senior officials sold shares to make gains before disclosing the information to the stock market.
“If required, these former KMPs will be summoned for questioning,” the officer added. The Securities and Exchange Board of India (SEBI) is also probing the matter, but its focus is on violations of market regulations, whereas the police are examining the criminal angle.
Earlier this month, banker Rajiv Anand was appointed as the new MD and CEO of IndusInd Bank, at a time when the institution is grappling with a ₹2,000-crore accounting controversy that has shaken investor confidence.
In April, CEO Sumant Kathpalia and Deputy CEO Arun Khurana had abruptly resigned following a forex derivatives blunder, which allegedly inflated the bank’s financial figures and eroded trust in the market.