(Reuters) -IndusInd Bank said on Thursday that an internal audit of its microfinance business found that a sum of 6.74 billion rupees ($79 million) was incorrectly recorded as interest over three quarters of fiscal 2025.
The amount was fully reversed on January 10, 2025, the bank said in an exchange filing.
IndusInd began the review into the microfinance business last month and had engaged EY for assistance.
The business, which accounts for 9% of the bank’s total loans, has been grappling with elevated bad loans over the last few quarters.
Microfinance loans are collateral-free loans to borrowers with annual income of up to 300,000 rupees.
The report, submitted on May 8, also found unsubstantiated balances aggregating to 5.95 billion rupees in “other assets” accounts of the bank, the Hinduja Group-owned lender said.
“These were set off against corresponding balances appearing in ‘other liabilities’ accounts in January 2025,” it added.
The findings add to IndusInd’s growing woes and come just weeks after its CEO and deputy CEO resigned following a derivatives accounting lapse that hit the bank’s net worth.
IndusInd said it was “taking necessary steps to strengthen internal controls, fix accountability of the persons responsible” for the microfinance unit’s lapses.
($1 = 85.4620 Indian rupees)
(Reporting by Nandan Mandayam in Bengaluru; Editing by Anil D’Silva)
