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Informist, Tuesday, Apr. 29, 2025

 

--IndusInd Bank MD, CEO Sumant Kathpalia resigns effective Tue

 

MUMBAI – Sumant Kathpalia Tuesday resigned as managing director and chief executive officer of embattled IndusInd Bank, taking "moral responsibility" for the discrepancies unearthed in the lender's derivatives portfolio. "I undertake moral responsibility, given the various acts of commission/omission that have been brought to my notice," Kathpalia said in his letter. He requested that the resignation be taken on record at the close of the day.

Kathpalia's resignation came a day after Arun Khurana resigned as deputy chief executive officer in the aftermath of the scandal that is set to cost the bank INR 19.60 billion. On Apr. 17, the bank had relieved Khurana of additional charge as its chief financial officer. Khurana had been given the additional charge in January.

 

Following Kathpalia's resignation, IndusInd Bank said Tuesday that the board had sought the Reserve Bank of India's approval to constitute a 'committee of executives' to perform the role of chief executive officer until a permanent appointment is made.

 

It was only on Mar. 7 that the Reserve Bank of India had approved Kathpalia's reappointment as managing director and chief executive officer of IndusInd Bank for a further term of one year ending Mar. 23, 2026, subject to shareholder approval. In September, the bank's board had approved a three-year term for Kathpalia, who was first appointed to the post on Mar. 24, 2020.

 

On Mar. 10, IndusInd Bank informed the exchanges that an internal review had unearthed certain discrepancies in the accounting of internal trades in its derivatives portfolio with the hit to its bottom line estimated at 2.35% of the lender's net worth as of Dec. 31. On Sunday, the bank said the accounting hit from the matter had been estimated at INR 19.60 billion, and it would be "appropriately" reflected in the statements for the financial year 2024-25 (Apr-Mar).

 

IndusInd Bank is yet to announce its financial results for Jan-Mar. On Tuesday, shares of the lender closed 0.8% higher at INR 836.95 on the National Stock Exchange. While the shares are currently down 7.1% from Mar. 10, they had fallen as much as 32.7% in the immediate aftermath of the disclosure of the accounting discrepancies.  End

 

Reported by Christina Titus 

Edited by Rajeev Pai

 

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