IndusInd Bank hid ₹2,362Cr derivatives gap — CEO resigned, SEBI banned trading

In March 2025, IndusInd Bank disclosed a massive accounting gap in its forex derivatives portfolio that had been known internally since December 2023. The bank's internal team estimated the financial impact at ₹2,362 crore by March 2024, and KPMG confirmed the issue at ₹2,093 crore in February 2024. Despite this, the bank delayed public disclosure for 15 months, only revealing the problem on March 10, 2025.

The delay had severe consequences. SEBI's investigation found that CEO Sumant Kathpalia and four other executives possessed unpublished price-sensitive information about the derivatives gap and sold shares before the public disclosure. SEBI banned all five from the securities market on May 28, 2025. Kathpalia and Deputy CEO Arun Khurana resigned in April 2025, citing 'moral accountability.' The bank's shares crashed 27% in a single day, wiping out approximately ₹19,052 crore in market value.

The bank later discovered additional accounting irregularities: ₹674 crore incorrectly recorded as interest income, ₹595 crore in unsupported balance sheet items, and ₹600 crore in interest accrual discrepancies on microfinance loans. Grant Thornton's forensic audit ultimately put the cumulative financial impact at approximately ₹1,960 crore. IndusInd Bank reported a net loss of ₹2,328.92 crore for Q4 FY2025.