IndusInd Bank shares update on MD & CEO Sumant Kathpalia's resignation, says this

Shares of IndusInd Bank Ltd are in focus on Wednesday, April 30, after the bank MD & CEO Sumant Kathpalia resigned, a day after Deputy CEO Arun Khurana's resignation, with immediate effect, in relation to the accounting discrepancies seen in the derivatives  portfolio. 

Following this, the RBI has approved the constitution of a committee of executives, comprising of Head of Consumer Banking -- Soumitra Sen, and Chief Administrative Officer -- Anil Rao, to oversee the operations of the bank under the oversight and guidance of an oversight committee of the board. 

To recall, the RBI had earlier granted only one-year extension to Kathpalia. This was against the board's proposal of three years in September 2024. According to reports, the RBI had asked the IndusInd Bank board to propose names of two external candidates for the positions of Chief Executive Officer and Chief Operating officer, 

"Managing Director & CEO, key managerial personnel of the bank, has by his letter dated April 29, 2025, resigned from services of the bank with effect from close of working hours on April 29, 2025," IndusInd Bank said in a statement. 

IndusInd Bank said the recent accounting discrepancies in its derivatives portfolio stemmed from incorrect accounting of internal derivative trades, especially in cases of early termination. These misstatements led to the recording of notional profits, identified as the primary cause of the discrepancies, it said.

It is estimated the cumulative adverse accounting impact on the bank's Profit and Loss (P&L) statement stood at Rs 1,959.98 crore as of March 31, 2025, consistent with the preliminary figure disclosed on April 15.

In his resignation Kathpalia said he took moral responsibility, given the various acts of commission and omission that have been brought to his notice. He would request that my resignation be taken on record at close of working hours on Tuesday.

"I would like to thank the Regulators, board, my management team members and staff for the support I got during my tenure of 5 years as the CEO," he said.

Now, the oversight committee will be chaired by the chairman of the board and would comprise the chairs of audit committee, the compensation and nomination & remuneration committee and the risk management committee, as members.

"Based on the RBI approval, the board has constituted such “Committee of Executives” to oversee the operations of the bank, under the oversight and guidance of the oversight committee of the board till a new MD & CEO of the bank assumes charge or a period of 3 months from the date of relieving the incumbent MD & CEO, whichever is earlier," IndusInd Bank said.