Former Chief Financial Officer of IndusInd Bank, Gobind Jain, has lodged a formal complaint with Mumbai’s Economic Offences Wing (EOW), alleging accounting irregularities stretching back to 2015 that have left the private lender exposed to losses of nearly ₹2,000 crore. His claims also include serious charges of insider trading by senior executives.
According to Jain’s submissions, the bank repeatedly misaccounted derivative trades executed internally—bookings that inflated profits early on and deferred recognition of losses. He alleges that successive management teams, board members, and former finance chief S.V. Zaregaonkar were aware of the discrepancies but failed to act.
In his letter to the Prime Minister’s Office, Jain called for the suspension of Chairman Sunil Mehta and a full independent probe.
The bank has denied the allegations, stating in a public response that the board disclosed irregularities promptly, engaged independent auditors, and fully cooperated with regulators.
Earlier in 2025, IndusInd admitted accounting lapses in its derivatives business involving internal cross-desk trades not properly marked to market.
The bank said it identified a hole of roughly $230 million (equivalent to over ₹1,900 crore) in its earnings. A forensic review led by Grant Thornton revealed further misstatements in microfinance income and “unsubstantiated balances” under other assets.
As the disclosures erupted publicly, senior leadership at IndusInd—a leading private sector bank—faced immediate fallout. In April, CEO Sumant Kathpalia and Deputy CEO Arun Khurana resigned, each citing “moral responsibility” amid governance concerns. A new oversight committee was formed, and the board initiated independent investigations to unravel the full extent of irregularities.
The ramifications quickly spilled into regulatory terrain. The Securities and Exchange Board of India (SEBI) has restrained Kathpalia, Khurana and three other senior officials from securities trading, alleging they sold shares while in possession of unpublished price sensitive information about the accounting lapses.
The Securities and Exchange Board of India claims these executives avoided losses totaling about ₹20 crore. Investigations are ongoing into whether their actions violated insider trading statutes.
Moreover, Mumbai’s Economic Offences Wing has already recorded statements from several bank employees, including Jain and Arun Khurana. The agency is reported to be considering whether to upgrade the preliminary enquiry into a full criminal case, assessing whether accounting gimmicks rose to the level of fraud or breach of trust.
While the probe continues, IndusInd Bank has undergone leadership changes. Virally experienced banking executive Viral Damania has been appointed as the new CFO, and the bank has pledged full cooperation with investigative agencies.
Observers note that the bank’s immediate reputation and credit standing are under stress, and restoring confidence will require decisive internal and regulatory resolution.
The charges raised by a whistleblower ex-CFO place IndusInd at the center of one of India’s most serious recent banking scandals.
If proven, the allegations will deepen scrutiny of internal control lapses, auditor oversight, and board accountability—not just at IndusInd, but across the broader Indian banking sector.
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