External auditor PwC may submit report on IndusInd Bank's accounting discrepancies on Friday

New Delhi: External auditor PwC is likely to submit its report to IndusInd Bank's board on Friday regarding accounting discrepancies in its derivatives portfolio, sources said.

As per an estimate, Rs 2,100 crore discrepancy in accounting may impact 2.35 per cent of the bank's net worth.

The comprehensive report by PwC is expected to point out actual loss to the bank due to accounting discrepancies, lapses at various levels and remedial action, sources said.

Banking sector regulator, Reserve Bank had directed the board and the management of IndusInd Bank to take remedial action during the current quarter itself after making required disclosures to all stakeholders.

The current quarter comes to an end on March 31.

Meanwhile, the IndusInd Bank's board has also hired Grant Thornton to conduct a forensic audit into accounting lapses.

As per the mandate, Grant Thornton would conduct a comprehensive investigation to identify the root cause of the discrepancies and assess the correctness and impact of the accounting treatment of the derivative contracts with regard to the prevailing accounting standards.

Additionally, the firm would identify any lapses and establish accountability with regard to discrepancies in accounting.

The bank on March 10, had disclosed certain discrepancies identified by the lender in its account balances relating to its derivatives portfolio.

Soon after the bank's disclosure, global rating agency Moody's placed the IndusInd Bank's baseline credit assessment (BCA) under review for a possible downgrade following the disclosure.

Moody's placed IndusInd's Ba1 Baseline Credit Assessment (BCA) and adjusted BCA under review for downgrade.

Baseline credit assessments are based on the entity's standalone financial health, without considering any support it might get from related companies.

Last week, IIHL chairman Ashok Hinduja said IndusInd Bank has not sought any fresh capital from its promoters even though it suffered a huge loss in its net worth following an accounting discrepancy.

IIHL, the investment arm of Hinduja Group, has recently got RBI's in-principle approval to raise its stake in IndusInd Bank from 16 per cent to 26 per cent.

According to Hinduja, IndusInd International Holdings Ltd (IIHL) -- the Mauritius-based promoters of the private sector lender -- has committed to infuse capital into the bank in case there is a requirement.