IndusInd Bank is focusing on strengthening retail liabilities, expanding secured retail and MSME lending, and adopting a selective approach in the corporate segment for the current financial year, according to Chairman Sunil Mehta. The initiatives come as the bank works to recover from financial and reputational setbacks caused by past governance lapses.
Calling FY25 a “watershed year” for the lender, Mehta acknowledged that it was also a period of internal reckoning. “We faced certain challenges that required swift, transparent, and decisive actions by the Board and management. These events, though unfortunate, have driven a major transformation rooted in ethics, accountability, transparency, and long-term sustainability,” he said in the bank’s latest annual report.
The Hinduja Group-promoted bank has been dealing with issues stemming from alleged irregularities in loan classification and trading activities. For the March quarter of FY25, it reported a consolidated net loss of ₹2,329 crore. Earlier in March, the bank disclosed a ₹1,979 crore accounting lapse in its derivatives portfolio. This was followed by an internal audit identifying ₹674 crore wrongly recorded as microfinance interest income, and ₹595 crore in “unsubstantiated balances” under “other assets” on the balance sheet.
“We have acted decisively to pursue higher standards of governance, transparency, and accountability. This governance culture will continue to be reinforced as we move forward,” Mehta assured shareholders. He emphasized that the bank’s balance sheet remains strong, supported by healthy capital adequacy, provision coverage, and liquidity—providing a solid base for future growth.
Looking ahead to the next fiscal year, IndusInd Bank will focus on scaling retail deposits, boosting secured retail and MSME assets, and executing its “One Bank” strategy to drive synergies. The bank will also pivot its rural operations towards “Bharat Banking” while remaining cautious in the microfinance space. Growth initiatives will include home loans, affluent banking, Digital 2.0, merchant acquiring, and micro-market-based distribution.
The leadership transition is also underway. Earlier this month, the bank appointed former Axis Bank Deputy MD Rajiv Anand as its new MD and CEO, effective August 25, 2025, through August 24, 2028, subject to shareholder approval. The move follows the April 29 resignation of MD & CEO Sumant Kathpalia, weeks after the disclosure of the accounting lapses.
“I acknowledge that the lapses are not what one expects from a bank of our stature. The Board and management have conducted a comprehensive review of all issues, and they have been fully reflected in the FY25 financial statements,” Mehta said. He added that Anand will begin with a “fresh and clean slate” to scale the franchise with a strong ethical foundation.
“The Board is working closely with management to drive a cultural shift that embeds ethics, transparency, and long-term sustainability in all our actions,” Mehta concluded.
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