New Delhi, May 6 -- IndusInd Bank's statutory auditors were reviewing the lender's latest quarterly numbers when they noticed something amiss: the bank had bunched interest income from many microfinance loans together, instead of making individual entries for them. The auditors flagged the matter to the lender, uncovering a Rs.600 crore discrepancy, three people aware of the matter said.

On 22 April, the bank said its internal audit department is reviewing its microfinance business to "examine certain concerns which have been brought to the bank's attention". IndusInd said it had appointed Big Four auditor EY to assist in reviewing these records.

"When auditors looked at the documents, they realized that these were shown as just a handf...