IndusInd Bank, one of India’s leading financial institutions, is set to face a substantial financial hit in the fourth quarter of the fiscal year 2025. The bank revealed that it will absorb a charge amounting to Rs 1,956 crore due to discrepancies in derivatives valuation. This development comes in the wake of an independent investigation initiated by the Reserve Bank of India (RBI) in response to the regulatory body’s stricter guidelines. The discrepancies arose from internal derivative trades conducted between the asset-liability management desk and the treasury, resulting in inflated earnings for the bank. In light of these lapses, IndusInd Bank has announced its intention to hold responsible employees accountable for their roles in the erroneous valuation of derivatives. This move underscores the bank’s commitment to transparency and compliance with regulatory standards. The financial impact of these discrepancies underscores the importance of stringent risk management practices within the banking sector. This incident serves as a cautionary tale for financial institutions to exercise diligence and due diligence in their financial operations to avoid similar pitfalls in the future.