SFIO Investigation Bank: SFIO’s intervention! IndusInd Bank credibility questioned, investors also worried

• Big financial crisis on IndusInd Bank
• Investigation by Serious Fraud Investigation Office
• Contrast between EOW) and SFIO

SFIO Investigation Bank: A major financial crisis has emerged for private sector major IndusInd Bank. The Serious Fraud Investigation Office (SFIO) will now probe the accounting irregularities in the bank’s derivatives portfolio and the resulting huge loss of Rs 1,960 crore. The bank itself has informed the stock exchange that it has received an official order regarding the inquiry. This poses a major challenge not only to the credibility of the bank but also to the confidence of the investors.

IndusInd Bank made the disclosure in a recent filing to the stock exchange. They have received a letter dated December 23 from the SFIO, directing them to initiate an inquiry into accounting irregularities in the bank’s derivatives portfolio. This inquiry relates to financial loss caused by accounting errors. The involvement of this special investigative agency of the central government in this case shows that the scale of irregularities can be very serious.

Also read: India–Bangladesh Relations: Tensions in India–Bangladesh relations; Why is Bangladesh dependent on India?

There appeared to be conflict between the Economic Offenses Wing (EOW) of the Mumbai Police and the SFIO. The SFIO’s investigation has begun at a time when Mumbai Police’s Economic Offenses Wing (EOW) was preparing to close the case. After a preliminary investigation, the EOW said, they did not find any concrete evidence of misappropriation or misappropriation of funds. As there was no evidence of criminal intent or diversion of funds, the police were of the view that there was no need to lodge an FIR. However, the SFIO will now conduct a thorough investigation into the technical and financial aspects of the matter.

Also read: Income Tax Return: Income Tax Department warns taxpayers; After 31st December, mistake correction will be costly

The whole controversy started when the bank’s external auditors found massive accounting discrepancies in its derivatives portfolio. 1,959.98 crores in the bank’s profit and loss account as on March 31, 2025 due to these errors. Subsequently, a report by another independent body said that these errors could negatively impact the bank’s net worth by ₹1,979 crore. The entire banking industry is now closely watching the SFIO’s next steps.