IndusInd Bank has officially responded to recent media reports suggesting that it has appointed Ernst & Young (EY) to conduct a forensic audit into its microfinance business, clarifying that no such forensic audit engagement has been initiated.
In its statement issued to the exchanges on April 23, the private sector lender stated, “We have not engaged EY for a forensic audit.” However, it acknowledged that the internal audit department of the bank is indeed conducting a review of its microfinance portfolio, especially in light of certain concerns that were brought to the bank’s attention.
To support this internal review, IndusInd Bank confirmed it has “engaged EY to assist the internal audit department in reviewing certain records.” This engagement, the bank emphasized, should not be construed as the initiation of a forensic audit.
This clarification comes after earlier reports by The Economic Times suggested that the bank had appointed EY to carry out a second forensic audit related to a ₹600 crore discrepancy in its microfinance portfolio. The report had further noted that the discrepancy was flagged by the bank’s statutory auditors during the review of its FY25 financials, prompting the invocation of Section 143(12) of the Companies Act — a clause that mandates reporting of suspected fraud to regulatory authorities.
The bank, in its clarification, reiterated that the internal audit review is part of the bank’s standard governance process as it finalizes its annual accounts for the year ended March 31, 2025. The lender aims to address any operational or accounting concerns within its microfinance division proactively.
This development comes even as Grant Thornton Bharat continues its previously announced forensic audit into alleged irregularities in the bank’s foreign exchange derivatives business.
