Synopsis: IndusInd Bank has begun a major restructuring focused on improving performance, where low-performing employees may exit. The overhaul followed the discovery of the Rs 1,960 crore accounting issue, which prompted stronger leadership hires and tighter controls to restore confidence and improve profits.
Incorporated in 1994 under the Banking Regulation Act, 1949, IndusInd Bank Limited is one of India’s leading private sector banks and has been backed by the Hinduja Group. The bank provides a range of financial products and services across retail banking, corporate banking, and treasury operations. With a nationwide network of 3,000 plus branches and presence at IFSCs in India, IndusInd Bank has been trying to expand its footprint and strengthen its position in the Indian banking sector.
But recently, in FY25 IndusInd Bank had reported a Rs 1,960 crore accounting loss after a forensic audit uncovered serious errors that were the result of major errors in how the bank handled its internal derivative trades. These trades in the context were done between departments within the bank itself , but when some of them were closed early, the bank recorded notional profits, these profits only existed on paper and are not calculated profits based on real market values. This inflated earnings over several years and went unnoticed due to weak internal checks. When a forensic audit recalculated the figures correctly, the bank’s net worth fell by about 2.27 percent
The discovery led to the discontinuation of internal derivative transactions from April 1, 2024, and triggered a major management shake-up along with stronger internal control and compliance measures.
Following the controversy, IndusInd Bank appointed Rajiv Anand as the new Managing Director & CEO in August 2025, with a three-year term approved by the Reserve Bank of India. Post which, the bank has been rebuilding top management by bringing in new heads for core functions which includes finance, internal audit, risk, and legal.
The focus has been shifted in order to improve financial discipline, reduce manual processes in the treasury function, eliminate legacy control gaps, and establish stronger governance standards across the organization.
Employee Restructuring and Performance Management
IndusInd Bank is currently undergoing an internal restructuring to improve- efficiency, accountability, and work culture. Moreover, CEO Rajiv Anand stated that the bank had accumulated organizational cholesterol, which basically stands for bureaucracy, inefficiencies, and outdated processes that slowed down decision making.
As part of the cleanup:
- The bank is removing or exiting non-performing employees
- Reviews and performance checks are being tightened
- The restructuring is going to be done without large-scale layoffs, i.e the total headcount is not expected to reduce drastically.
- Like other major banks, underperformance will result in exits, but no mass job cuts are planned
The goal is to create a leaner and more efficient organization while retaining talent, along with strengthening execution. Despite the setbacks, IndusInd Bank remains to be well-capitalized, with a capital adequacy ratio of around 17 percent and CET-1 above 15 percent. The bank returned to profitability in early FY26, reporting Rs 604 crore profit in Q1, along with the revenue which also increased by 15 percent to Rs 12264 Cr.
The CEO has set an aggressive target of reaching 1 percent Return on Assets (RoA) within 12–18 months, signaling a strong turnaround plan.
IndusInd Bank is now shifting focus toward predictable and growth-heavy retail segments, including:
- Home loans
- MSME lending
- Loans against securities
- Wider wealth management offerings
- More use of automation and artificial intelligence in order to reduce operational risk.
With rising affluence in smaller cities, wealth management is expected to be a long-term growth engine.
-Adithya Menon
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