IndusInd Bank case: EOW finds no evidence of criminal conduct by former executives, likely to close probe soon

The Mumbai Police Economic Offences Wing (EOW) has found no evidence of any criminal conduct by former executives of IndusInd Bank in connection with the ₹1,950 crore and ₹258 crore accounting discrepancies that were under scrutiny.

EOW sources told CNBC-TV18 that the investigation so far has revealed that the initial ₹1,950 crore figure, which triggered a sharp fall in the bank’s stock earlier this year, was a genuine accounting error and not a case of fund diversion or manipulation.

During the course of the preliminary enquiry (PE), the agency had later examined another ₹258 crore entry that had surfaced in the audit report by Grant Thornton.

The report had suggested that this amount was selectively used to boost the bank’s net interest income in certain quarters when results lagged expectations.

However, EOW sources have now confirmed that the ₹258 crore entry too appears clean, with no evidence of siphoning of funds or criminality.

EOW officials told CNBC-TV18 that, “We have written to the banking regulator regarding a couple of queries that we had. Based on their reply, we will come to a conclusion. There is currently no further enquiry we are doing. No criminal conduct found so far."

The EOW had earlier questioned former top executives including ex-MD & CEO Sumant Kathpalia, ex-Deputy CEO Arun Khurana, and CFO Gobind Jain, but has since ruled out any wrongdoing.

Mumbai Police has also written to the Reserve Bank of India seeking clarification on a few technical points before formally closing the probe.

With no evidence of criminality or fund siphoning established, the EOW is expected to close the preliminary enquiry soon, and based on the investigation so far, sources say that there is no base or evidence to file an FIR in the case.Read about our editorial guidelines and ethics policy