IndusInd Bank Engages EY for MFI Audit
Apr 22, 2025 18:19
IndusInd Bank has engaged EY to assist in reviewing concerns related to its microfinance (MFI) business. The bank is conducting an internal audit to examine concerns brought to its attention.
Illustration: Dominic Xavier/Rediff.com
New Delhi, Apr 22 (PTI) IndusInd Bank on Tuesday said it has engaged EY to assist the bank's Internal Audit Department (IAD) to review concerns related to microfinance (MFI) business.
As a part of the process of finalisation of accounts, the bank's Internal Audit Department (IAD) is conducting a review of the bank's MFI business to examine certain concerns which have been brought to the bank's attention, IndusInd Bank said in a regulatory filing.
In connection with this exercise, bank is engaged with EY to assist the IAD in reviewing certain records of the bank, it said.
The review by the bank is ongoing, it added.
Last week, IndusInd Bank said that accounting lapses in the derivative portfolio will have a negative impact of Rs 1,979 crore on the bank's networth.
The bank has assessed an adverse impact (on a post-tax basis) of 2.27 per cent to its net worth as of December 2024 on account of discrepancies relating to derivative deals.
The private sector lender last month reported the accounting lapses in the derivative portfolio estimated to have an adverse impact of approximately 2.35 per cent of the bank's net worth as of December 2024.
Following this, the bank appointed external agency PwC to assess the impact on the bank's balance sheet, lapses at various levels and suggest remedial action.
The agency in its report has quantified the negative impact of the above as of June 30, 2024, at Rs 1,979 crore, the bank had said.
The bank will appropriately reflect the resultant impact in the financial statements for 2024-25 and continue to take suitable steps to augment the internal controls relating to the derivative accounting operations, it added.
Meanwhile, the IndusInd Bank's board has also hired Grant Thornton to conduct a forensic audit into accounting lapses.
As per the mandate, Grant Thornton would conduct a comprehensive investigation to identify the root cause of the discrepancies and assess the correctness and impact of the accounting treatment of the derivative contracts with regard to the prevailing accounting standards.
Additionally, the firm would identify any lapses and establish accountability with regard to discrepancies in accounting.
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