SEBI Amends IndusInd Bank Order; Replaces ‘Board Note’ With ‘Engagement Note’

SEBI Amends IndusInd Bank Order; Replaces ‘Board Note’ With ‘Engagement Note’

This was to clarify the nature of documents involved in the bank's internal dealings

The Securities and Exchange Board of India (SEBI) has issued a corrigendum to its interim order against Indusind Bank Limited. It has replaced the term 'board note' used in its earlier order, to be now read as 'engagement note’.

The correction came as SEBI continues to investigate accounting irregularities at the private sector lender. Earlier, it had been mentioned that global consulting firm KPMG was appointed by IndusInd Bank in February 2024 based on a 'board note'.

The regulator has now clarified that KPMG's appointment was based on an 'engagement note', a less formal document, generally used for assigning tasks to external consultants.

Meanwhile, SEBI’s investigation revealed that the former Chief Financial Officer of IndusInd Bank had stated in January 2024 that a consultant was being hired to assess the financial impact of the previously identified discrepancies.

Later, KPMG reported a loss of Rs.2,093 crore linked to the issues. However, SEBI noted that despite the massive amount involved, the bank neither disclosed the findings to the stock exchanges nor marked the information as unpublished price-sensitive data until 4 March 2025.

However, KPMG sought further discussions with bank officials to verify the numbers, including specific accounting entries.

In its interim order, SEBI named four senior executives - Arun Khurana, former Executive Director and Deputy CEO; Sushant Sourav, Head of Treasury Operations; Rohan Jathanna, Head of GMG Operations and Anil Marco Rao, Chief Administrative Officer for Consumer Banking Operations, for their alleged role in the matter.

They have been barred from buying, selling or dealing in securities in any form until further notice.

Meanwhile, RBI Deputy Governor J Swaminathan stated that the situation at IndusInd Bank was stabilising and 'everything is more or less on track.'

RBI Governor Sanjay Malhotra said that the bank had taken significant steps to improve its accounting standards and overall, it was performing well.