IndusInd Bank has come under renewed scrutiny after its former Chief Financial Officer, Gobind Jain, urged the Centre to remove Chairman Sunil Mehta, accusing him of concealing accounting discrepancies within the lender, and sought government intervention. IndusInd Bank, however, has categorically denied the accusations.The allegations, first reported by the Economic Times, follow months after the private sector bank admitted to lapses in its derivatives portfolio.
Speaking to CNBC-TV18, Gobind Jain said he was compelled to write a letter to the Prime Minister’s Office earlier this August, claiming the bank is attempting to “build a false case” against him and file a complaint with enforcement agencies.“I was the only person who highlighted the issue on accounting discrepancies, and now they are targeting me, saying I knew about it and was trying to cover it up,” Jain told CNBC-TV18.Jain, who stepped down as CFO in January, claimed in his letter to the PMO that he had uncovered serious issues in the bank’s treasury operations that had persisted for over a decade, and that he was the only executive to do so.“The Bank has been lying about the issue,” Jain said, adding he suspects the accounting discrepancies have persisted for nearly ten years, as opposed to six years claimed by the bank.“I started having suspicions in late 2023 and highlighted it internally. I did not yet have evidence to present to the board. When I began collecting evidence, they started targeting me,” he alleged.“I had to write to the Prime Minister as there was no way out. I am being targeted emotionally and financially,” Jain claimed. In his letter, he urged the Centre to suspend Chairman Sunil Mehta and conduct an enquiry into the bank’s affairs.The former CFO added that although he resigned in January, he was not formally relieved by the bank, preventing him from joining elsewhere. He further alleged that Sunil Mehta and his aides created an “atmosphere of fear,” targeting him while shielding those responsible.CNBC-TV18 could not independently verify Jain’s claims.In a statement on Thursday, IndusInd Bank said: “The Bank categorically rejects these allegations against the Board Chairman and others, which are completely devoid of merit and an attempt to deflect due process of law and accountability. The Board has collectively taken decisions to address incidents of gross irregularity, suspected fraud and dereliction of duty that were brought to the attention of the Board. The Bank has made disclosures in a fair and transparent manner based on investigations conducted by independent internal and external experts.”The bank added that it has reported the matter to regulators and law enforcement agencies and is cooperating fully with authorities. “The Bank continues to take all necessary steps in accordance with the extant rules and regulations and is confident that accountability will be fixed as per due process of law,” it said.The controversy follows a difficult year for IndusInd. In March, the bank disclosed accounting lapses in its derivatives portfolio could impact 2.35 percent of its net worth as of December 2024. The revelation sparked a market rout, with the stock plunging 26 percent in a single day, erasing significant investor wealth.The fallout prompted the resignation of then-CEO Sumant Kathpalia and then-Deputy CEO Arun Khurana in April. Former Axis Bank Deputy Managing Director Rajiv Anand has since taken charge as Managing Director and CEO, while Pragati Gondhalekar was recently appointed head of internal audit in a leadership reshuffle aimed at restoring confidence.
