Rejecting the former CFO's accusations, IndusInd Bank describes them as "baseless and motivated."

Gobind Jain, the former chief financial officer (CFO) of IndusInd Bank, accused Sunil Mehta, the chairman of the lender's board, of concealing accounting errors. IndusInd Bank rejected his claims on Thursday. The bank described the charges as an attempt to avoid responsibility and labeled them "completely devoid of merit." According to a statement from IndusInd Bank, the board had taken coordinated action to resolve "gross irregularity, suspected fraud, and dereliction of duty" situations that were brought to its notice. Based on investigations conducted by independent internal and external experts, the bank further stated that it had disclosed information "in a fair and transparent manner." The lender added that it was completely complying by providing all required documentation and that it had reported the issue to authorities and law enforcement. According to the statement, "The bank is confident that accountability will be fixed as per due process of law and continues to take all necessary steps in accordance with existing rules and regulations." Claims made by the former CFO Jain, who resigned in January, has called on the government to remove Mehta from his position as chairman of the board, claiming that he was involved in stifling accounting errors that caused the largest single-day stock decline for IndusInd Bank since it was listed. He asserted that he exposed long-standing problems in Treasury operations and waged a "lone battle" to draw attention to them, only to be singled out by upper management. Jain claims that Mehta and his associates protected individuals in charge of irregularities while fostering a "atmosphere of fear" within the bank. consequences of accounting errors This year, IndusInd Bank admitted to accounting errors in its derivatives portfolio, which the company claimed may have a negative effect of 2.35 percent of its net value as of December 2024. This revelation is the source of the controversy. The stock fell 26% in a single session after the news, wiping out billions of dollars in investor capital. In April, CEO Sumant Kathpalia resigned as a result of the consequences. The Reserve Bank of India (RBI) responded by stating that IndusInd's financial status was "satisfactory" and that it was still "well-capitalized." Later, RBI Governor Sanjay Malhotra reiterated that India's banking system was still "safe and secure" and referred to the situation as a "incident" rather than a systemic breakdown.