Private Sector Lender IndusInd Bank is in the middle of a storm, with a former top executive alleging treasury-related irregularities to the tune of Rs 2,600 crore over more than a decade.
It all began with a letter dated August 26, addressed to the Prime Minister’s Office, by Gobind Jain, the bank’s former Chief Financial Officer.
In his communication, Jain claimed that serious irregularities have been going on in the bank’s treasury operations for more than a decade. According to him, he was the only one to have flagged the alleged violations.
In what he described as a “lone battle”, Jain said he tried to expose the irregularities despite fear and resistance within the bank.
Gobind Jain’s story does not accuse the bank’s top management of financial irregularities alone. He has alleged that some senior officials of the bank, especially board chairman Sunil Mehta and his close associates, created a “climate of fear” inside the institution.
According to Jain, as soon as he raised these issues, he was deliberately targeted while the real culprits were protected.
Matters escalated further when employees who supported him were also sidelined, according to Jain.
“Baseless and motivated”: IndusInd Bank’s denial
IndusInd Bank has outrightly rejected all allegations made by Jain, calling them “baseless and motivated”. The bank said it had already disclosed accounting irregularities in derivatives, microfinance, and other revenue streams to the stock exchanges between March and May 2025.
It also said that independent investigations were carried out by external agencies, while fraud complaints were filed with the regulator, the Serious Fraud Investigation Office (SFIO), and the Mumbai unit of the Economic Offences Wing (EOW).
The bank has appealed to the Finance Ministry to dismiss Jain’s complaint, arguing that its board acted with integrity and transparency, while Jain was attempting to obstruct ongoing investigations.
A spokesperson said that the details of irregularities in the derivatives portfolio and subsequent actions had been disclosed to the stock exchange.
Rs 2,600 crore hit and market shock
In March, the Hinduja group-promoted bank disclosed certain suspected frauds that caused a quarterly hit of about Rs 2,000 crore.
Auditors also flagged accounting discrepancies amounting to Rs 2,600 crore.
This included:
– Inflated income shown from microfinance loans
– Misclassification of assets and liabilities
– Writing off Rs 1,960 crore of fictitious profits from internal derivative trades
– The fallout was severe: IndusInd Bank’s shares crashed as much as 27 per cent in the very next trading session — their steepest single-day fall since listing, back in 1997.
Jain, who stepped down as IndusInd Bank’s CFO in January, has urged the central government to remove the lender’s chairman, Sunil Mehta.
Jain has accused Mehta of covering up accounting irregularities that duped investors of their hard earned money in this crash.
This saga is far from over
On one side is a whistleblower taking on the system; on the other, a major bank defending its record. What is certain, however, is that this episode raises serious questions and concerns about transparency and corporate governance in the country’s banking sector.
Are Jain’s allegations credible?
Are the bank’s denials accurate?
Does the truth lie somewhere in between?
The answers will come only after scrutiny, but one thing is clear: this battle is not just about numbers on paper but more about trust and integrity in banking.
