– IndusInd Bank reported a consolidated net loss of ₹2,328.9 crore for the fourth quarter ended March 31, 2026, marking a significant deterioration from the net profit of ₹2,349.15 crore recorded in the same quarter of the previous financial year. The sharp reversal in financial performance is attributed to elevated provisioning requirements, a decline in net interest income, and irregularities identified in the bank’s microfinance operations.
Profit Decline for Full Year FY25
For the full financial year 2024–25, the private sector lender reported a 71.3% decline in consolidated net profit, which dropped to ₹2,576 crore from ₹8,977 crore in FY24. The decline reflects the impact of provisioning, irregular accounting entries, and disruptions following top-level management exits.
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Spike in Provisions and Impact on Interest Income
Provisioning during the March 2026 quarter surged to ₹2,522 crore, compared to ₹950 crore in the corresponding quarter of FY24. For the full year, total provisioning increased to ₹7,136 crore from ₹3,885 crore in the previous fiscal, as the bank responded to heightened risk in its microfinance book and derivative-related issues.
Interest income for the quarter declined 13% year-on-year to ₹10,634 crore, compared to ₹12,199 crore in Q4 FY24. The bank’s net interest income (NII) also witnessed a 43% year-on-year drop, driven largely by stress in the microfinance segment and downward repricing of assets.
Internal Audit Flags Accounting Lapses
During the March quarter, IndusInd Bank disclosed several accounting lapses, including misstatements in its microfinance and derivative portfolios. An internal audit conducted by the bank’s Internal Audit Department (IAD) flagged unsubstantiated balances worth ₹595 crore in the “other assets” section of the balance sheet. Additionally, a cumulative amount of ₹674 crore was found to be incorrectly recorded as interest income over the last three quarters.
The bank also revealed that in March 2026, discrepancies in its derivative portfolio accounting could adversely impact 2.35% of its net worth as of December 2024. As a corrective measure, the bank appointed PricewaterhouseCoopers (PwC) to conduct an independent review and assess the financial implications and systemic failures.
PwC’s forensic review, completed by June 30, 2024, estimated the adverse financial impact at ₹1,979 crore. The findings prompted the bank to initiate remedial steps, including a review of roles and responsibilities and the implementation of stronger internal controls.
Senior Management Resignations and Interim Oversight
On April 29, 2026, IndusInd Bank’s CEO Sumant Kathpalia and Deputy CEO Arun Khurana resigned in the wake of the ongoing investigations and audit findings. In response, the board of directors formed a Committee of Executives to oversee day-to-day operations until a new Managing Director and CEO is appointed, or for a maximum interim period of three months.
The bank has publicly committed to full compliance with regulatory requirements and legal frameworks, stating: “The Bank is fully committed towards taking these matters to their conclusion under applicable laws.”
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Market Reaction
Following the announcement of the financial results and the disclosure of internal audit findings, IndusInd Bank’s shares closed at ₹771.10 on the Bombay Stock Exchange (BSE), marking a decline of 1.39% from the previous day’s close. The stock has witnessed increased volatility in recent months amid investor concerns over governance and financial reporting standards.
Looking Ahead
As the bank continues its efforts to restore operational integrity and rebuild stakeholder confidence, regulatory scrutiny and investor attention remain high. The outcome of the forensic audit and the appointment of new leadership are expected to play a critical role in determining the future course for IndusInd Bank in FY26.