Ex-IndusInd Bank CFO seeks more time in Rs 2,000-crore probe

Mumbai: Former IndusInd Bank CFO Gobind Jain on Monday sought more time from Mumbai Police's Economic Offences Wing (EOW), which is conducting a preliminary enquiry into alleged financial irregularities at the lender, for submitting documents to back his claim that he was the one who flagged the lapses.

Following the summons issued by the EOW, Jain appeared in the morning and requested more time.

"He has also claimed to have recently written to the Prime Minister's Office (PMO) against the bank's senior management and wishes to make his case on the same. He has been asked to return on Thursday," a senior EOW official said.

The agency launched its enquiry in August after the Hinduja Group-promoted private lender filed a complaint flagging suspected accounting lapses, which it believes may date back to 2015 but were detected only in FY25. Earlier this month, the EOW also summoned former CEO Sumant Kathpalia and ex-deputy CEO Arun Khurana.

The alleged irregularities stem from unhedged Japanese yen contracts used to manage funding costs. Investigators say internal trades between the bank's dollar and yen desks were booked on an accrual basis, while external trades were marked to market, creating a mismatch. This led to inflated profits in earlier years and delayed recognition of losses, which now stand at nearly ₹2,000 crore.

In March, IndusInd Bank disclosed a ₹1,979-crore accounting lapse in its derivatives portfolio. Subsequent audits uncovered additional issues: ₹674 crore wrongly booked as microfinance interest income, ₹595 crore in "unsubstantiated balances" under other assets, and ₹172.58 crore misclassified as fee income, which was later reversed.

So far, statements of seven suspended employees and staff linked to the finance and accounts departments have been recorded.

Another EOW official said, "The staff are blaming the erstwhile management, and now the former CFO is blaming senior officials. The probe will establish where the buck stops. The report prepared by GT roped by the bank will also be studied to understand what the forensic auditor has relied upon to uncover lapses."

The officials added that email chains and other documents are under scrutiny.

Jain has written to the PMO seeking the removal of IndusInd Bank chairman Sunil Mehta, accusing him of creating an "atmosphere of fear" and shielding those responsible for the lapses. He claimed he was the only executive to detect the problems and had fought a "lone battle" to highlight them. The bank has denied these allegations then.

While the Securities and Exchange Board of India is examining possible securities law violations, the Mumbai police are probing potential criminal offences, including breach of trust. "The probe will ascertain if the losses were merely notional or if deliberate wrongdoing caused actual loss to the lender," an official said.

Following the sudden exits of Kathpalia and Khurana in April, the bank later appointed veteran banker Rajiv Anand as managing director and CEO. No FIR has been registered so far, as the enquiry remains at a preliminary stage.