IndusInd Bank has been hit by a major whistleblower disclosure, with a former top executive alleging treasury-related irregularities running into Rs 2,600 crore over more than a decade.
The episode began with a letter dated August 26, addressed to the Prime Minister’s Office, by Gobind Jain, the bank’s former Chief Financial Officer. In his communication, Jain claimed that “serious irregularities have been going on in the bank’s treasury operations for more than a decade.”
According to him, he was the only one to have flagged the alleged violations. In what he described as a ‘lone battle’, Jain said he tried to expose the irregularities despite fear and resistance within the bank.
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Gobind Jain’s story is not limited to financial irregularities, but also has a darker side. He alleged that some senior officials of the bank, especially Sunil Mehta and his close associates, created a “climate of fear” inside the institution. According to Jain, as soon as he raised these issues, he was deliberately targeted while the real culprits were protected. Matters went further when employees who supported him were also sidelined. It reads almost like a movie script, where the one raising the voice of truth is silenced.
Bank’s denial: baseless and motivated
But there is another side to the story. IndusInd Bank has outrightly rejected all allegations made by Jain, calling them “baseless and motivated.” The bank said it had already disclosed accounting irregularities in derivatives, microfinance, and other revenue streams to the stock exchanges between March and May 2025. It added that independent investigations were carried out by external agencies, while fraud complaints were filed with the regulator, the Serious Fraud Investigation Office (SFIO), and Mumbai’s Economic Offences Wing (EOW).
The bank has also appealed to the Finance Ministry to dismiss Jain’s complaint, arguing that its board acted with integrity and transparency, while Jain was attempting to obstruct ongoing investigations. A spokesperson said all details of irregularities in the derivatives portfolio and subsequent actions had been disclosed to the stock exchange.
Rs 2,600 crore hit and market shock
This controversy is not without substance. In March, the Hinduja-promoted bank disclosed certain suspected frauds that caused a quarterly hit of about Rs 2,000 crore. Auditors also flagged accounting discrepancies amounting to Rs 2,600 crore.
This included inflated income shown from microfinance loans.
Misclassification of assets and liabilities
Writing off Rs 1,960 crore of fictitious profits from internal derivative trades
The fallout was severe: IndusInd Bank’s shares crashed as much as 27 per cent in the very next trading session — the steepest single-day fall since listing. For investors, it meant a direct blow to their hard-earned money.
This saga is far from over. On one side is a whistleblower taking on the system; on the other, a major bank defending its record. Where the truth lies will only be known after investigations conclude. What is certain, however, is that this episode raises serious questions about transparency and corporate governance in India’s banking sector.
Are Jain’s allegations credible? Are the bank’s denials accurate? Or does the truth lie somewhere in between? The answers will come only after scrutiny, but one thing is clear — this battle is not just about numbers on paper, but about trust and integrity in banking.
