IndusInd Bank: Committee of officers formed to run IndusInd Bank after the resignation of CEO
New Delhi| The board of directors of IndusInd Bank has appointed a ‘committee of officers’ to oversee the operations of the bank following the resignation of CEO Sumant Kathpalia. The bank gave this information on Wednesday. Kathpalia resigned from the services of the bank with effect from April 29, 2025, taking moral responsibility for accounting lapses involving the derivatives portfolio in a financial misappropriation case of Rs 1,960 crore.
“The board has constituted an “executive committee” to oversee the operations of the bank”, IndusInd Bank said in a regulatory filing. This committee will work until the new MD and CEO takes office or for a period of three months.
The Bank has informed that the Oversight Committee will be chaired by the Chairman of the Board and will include the Chairman of the Audit Committee, Compensation, Nomination and Remuneration Committee and Risk Management Committee as members. The board has constituted the executive committee after approval from RBI.
According to the bank, it is taking all necessary steps to ensure stability and continuity of its operations. Along with this, high standards of administration are also being followed. Earlier this week IndusInd Bank had informed the stock market that the external auditor appointed by the bank had detected an adverse impact of Rs 1,959.98 crore on the profit and loss account as of March 31. This is almost identical to the amount reported by the Bank on 15 April.
Impact on bank’s net worth due to irregularities related to derivatives deals
On April 15, IndusInd Bank had revealed, based on another external agency report, that an accounting lapse in the derivatives portfolio would have a negative impact of Rs 1,979 crore on its net worth. The bank has assessed an adverse impact (on an after-tax basis) of 2.27 per cent on its net worth as of December 2024 due to glitches involving derivatives deals.
The development follows an independent investigation conducted by a professional firm appointed by the bank’s board on 20 March 2025. Sunday’s report identified miscounting of internal derivatives trades. According to the report, hypothetical profits were recorded, especially in cases involving deals that ended prematurely which is the root cause of irregularities in accounts.
According to the report, the role and functions of key employees in this matter were also investigated. IndusInd Bank had revealed that the board is taking necessary steps to hold the persons responsible for these lapses accountable and bring the roles and responsibilities of senior management back on track.
IndusInd Bank shares remained stable
IndusInd Bank shares remained stable on Wednesday. A day earlier, the bank’s MD and CEO Sumant Kathpalia had resigned with immediate effect, taking moral responsibility for the accounting lapses in the derivatives portfolio. The bank has suffered a financial loss of Rs 1,960 crore due to this.
The stock closed at Rs 838.45 on BSE with a slight gain of 0.14 per cent. It fell 3.21 per cent to Rs 810.40 during trading. The company’s shares closed at Rs 838.40, up a modest 0.17 per cent on the NSE. Shares fell 3.21 per cent to close at Rs 810.05 in intra-day.
