‘Egregious violations’ by IndusInd bank senior officials, SEBI is looking into it along with RBI

Capital markets regulator SEBI is actively examining possible violations in the IndusInd Bank case, following the lender’s recent disclosure of suspected fraud and allegations of insider trading involving senior officials. SEBI Chairman Tuhin Kanta Pandey, speaking at an Assocham event in New Delhi, confirmed that the regulator is looking into any egregious violations under its jurisdiction.

“The RBI is looking into accounting discrepancies at IndusInd Bank. Whatever falls under SEBI’s remit, we are pursuing. If there are any serious violations by individuals, SEBI is looking into that as well,” Pandey stated.

The development follows IndusInd Bank’s announcement of a massive net loss of ₹2,328.92 crore in the fourth quarter of FY 2024–25 — its first financial report since uncovering major accounting irregularities. The revelations have triggered intense regulatory scrutiny, the resignation of top executives, and multiple layers of internal and external audits.

During a post-earnings call, the bank’s board revealed that it suspects fraud involving certain employees deeply involved in financial reporting and accounting. As per the board, necessary steps under applicable laws have been initiated, including informing regulatory and investigative bodies.

The internal audit committee on bank further stated that its investigations point to the likely involvement of former Key Managerial Personnel (KMP) and other senior officials. These individuals are suspected of overriding internal controls, concealing wrongful accounting practices, and failing to inform both the board and statutory auditors.

“Based on the re-evaluation of findings, there appears to be deliberate concealment by senior bank officials, including former KMPs, across various functions,” the committee stated, adding that such actions persisted over a significant period.

As the situation unfolds, SEBI and RBI are expected to continue their respective investigations, while investors and market observers closely monitor developments in what is shaping up to be one of the most serious financial integrity cases in the Indian banking sector in recent years.

⸻

Auhor -

Raj Gupta