IndusInd Bank chief signals microfinance recovery after governance crisis

The microfinance business at IndusInd Bank is poised for recovery after navigating a challenging period marked by significant accounting irregularities, according to Rajiv Anand, the bank's managing director and chief executive officer.

IndusInd Bank faced a major governance crisis in 2025 centred on Bharat Financial Inclusion Ltd (BFIL), its microfinance subsidiary. The bank reversed Rs 674 crore in cumulative interest income that had been incorrectly recognised during the financial year. Additionally, Rs 172 crore was identified as fraud, involving employees who had misreported the amount as fee income within the microfinance operations.

"We have had a fairly difficult time on our microfinance business. But it is all now behind us. Risk is playing out quite well at this point in time and Q2 onwards we should see growth come back in our microfinance businesses," Anand said in an interview.

Despite the challenges, the microfinance arm operates successful lending initiatives, including Bharat Superstore, which provides credit facilities to kirana store owners and small retailers. The bank's leadership has expressed confidence that remedial measures have adequately addressed the underlying issues and that the segment is positioned for renewed expansion in coming quarters.