PwC Concludes IndusInd Bank Accounting Review as Grant Thornton Begins Forensic Audit

 In a major development in India’s banking sector, PricewaterhouseCoopers (PwC) has officially completed its accounting review of IndusInd Bank, following concerns raised around the bank’s internal financial controls and practices. As PwC exits the scene, Grant Thornton has now taken over to carry out a detailed forensic audit, deepening scrutiny into the bank's operations.

This comes at a time when trust in the Indian banking system is already under pressure due to past financial scandals. Here's a detailed look into what led to the review, what the accounting findings suggest, and what lies ahead for IndusInd Bank.

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Background: Why Was IndusInd Bank Under Review?

The concerns began surfacing earlier this year when whistleblowers and market analysts started raising red flags about certain loan practices and accounting anomalies at IndusInd Bank. These included:

• Evergreening of loans — the practice of providing new loans to help borrowers repay old ones, thereby masking defaults.

• Delayed recognition of NPAs (Non-Performing Assets).

• Alleged internal lapses in risk management and accounting oversight.

These issues prompted both internal and external scrutiny, leading the board of IndusInd Bank to bring in PwC for an independent accounting review. Simultaneously, regulatory bodies like the Reserve Bank of India (RBI) and SEBI also began seeking clarity from the bank's management.

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PwC’s Review Findings: A Summary

While the detailed PwC report has not been made public, sources indicate that the accounting review concluded without evidence of systemic fraud. However, several areas of concern were reportedly flagged:

1. Operational Gaps: Weaknesses in the monitoring and documentation of certain loans.

2. Compliance Lapses: Instances where internal risk controls weren’t followed rigorously.

3. Data Mismatch: Variations between reported data and internal records on stressed accounts.

These findings have been termed "non-material" by insiders, but the very fact that a forensic audit is now underway suggests deeper scrutiny is needed.

Grant Thornton’s Forensic Probe Begins

Following the wrap-up of PwC’s accounting review, the bank’s board has now mandated Grant Thornton Bharat LLP to conduct a forensic audit. This indicates a more granular, investigative audit, typically reserved for scenarios where:

• Fraud is suspected

• Criminal or civil liability may arise

• Regulators demand deeper investigation

The forensic probe will reportedly focus on a specific portfolio of corporate loans, as well as internal email trails, audit logs, and approval hierarchies for those accounts.

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Official Statement by IndusInd Bank

In an official exchange filing, IndusInd Bank stated:

“The accounting review by PwC has been concluded. As part of our commitment to transparency and governance, we have engaged Grant Thornton to undertake a forensic audit of select accounts. The bank continues to operate within regulatory guidelines and maintains strong liquidity and capital adequacy.”

The bank emphasized that the move is part of a “proactive governance approach” and not due to any directive from regulators.

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Market Reaction: How Investors Are Responding

The stock market reacted cautiously positive to the news. IndusInd Bank’s shares initially dipped following rumors of a forensic audit but later stabilized as more clarity emerged.

Key metrics as of latest market close:

• Stock Price (NSE): ₹1,345.60

• Change: +0.85% on the day

• 52-week range: ₹990 – ₹1,435

Brokerage houses like CLSA and ICICI Securities have maintained a “Hold” rating on the stock, citing uncertainty from ongoing audits but acknowledging the bank’s strong retail growth and liquidity.

Expert Opinions on the Forensic Audit

Financial experts believe that IndusInd Bank’s move to initiate a forensic audit is a positive signal for corporate governance. Here's what they’re saying:

It shows that the bank is serious about getting to the root of any operational lapses and not sweeping things under the rug.”
— Rashmi Desai, Financial Forensics Analyst

“PwC’s exit doesn’t mean there’s nothing to worry about. The forensic probe could reveal more detailed or account-specific issues that an accounting review might miss.”
— Akhil Mehra, Partner, Corporate Law Firm

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What Happens Next?

Grant Thornton's forensic audit is expected to be completed over the next 60–90 days, after which:

• A detailed report will be submitted to the bank’s board.

• If serious discrepancies are found, regulatory bodies (RBI, SEBI) may step in.

• Legal action may be considered against individuals if wrongdoing is proven.

• The bank could make additional disclosures or provisions, depending on findings.

This timeline also means investors and stakeholders will likely remain in a wait-and-watch mode until mid-year.

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What This Means for Indian Banking

The IndusInd Bank case is yet another wake-up call for the Indian banking ecosystem. While large public sector banks have faced scrutiny in the past, the spotlight is now turning to private banks, where rapid digitalization and aggressive lending strategies sometimes outpace internal controls.

With the RBI tightening its norms on loan provisioning and audit standards, banks are under increasing pressure to maintain transparency and compliance.

Key Takeaways at a Glance

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Social Buzz & Industry Watch

The news has sparked wide discussion on platforms like Twitter, LinkedIn, and finance forums like ValuePickr.

Trending hashtags:

• #IndusIndBank

• #ForensicAudit

• #PwCReview

• #GrantThornton

• #BankingNewsIndia

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Conclusion: Transparency or Trouble Ahead?

Whether this move turns out to be a precautionary exercise or a sign of deeper issues, one thing is clear — IndusInd Bank is under the microscope. For now, the bank seems to be taking all the right steps to address concerns head-on, and its commitment to forensic clarity may work in its favor in the long run.

But with Grant Thornton’s report expected in a few weeks, the real picture is still developing.

Stay tuned. This story is far from over.