IndusInd CEO Kathpalia quits, RBI approves interim leadership

The Reserve Bank of India has given its nod to set up a panel to oversee operations at IndusInd Bank after chief executive officer and managing director Sumant Kathpalia resigned from his role on Tuesday, the lender said in a regulatory filing on Wednesday.

The internal panel will include head of consumer banking Soumitra Sen  and chief administrative officer Anil Rao who will oversee daily affairs under the supervision of an oversight committee of the board.

The bank said last month that during an internal review it noted some discrepancies in the account balances relating to other asset and other liability accounts of its derivative portfolio.

In an exchange filing on 10 March, IndusInd Bank said the internal review of its derivative portfolio uncovered a potential 2.35% hit to its net worth, which stood at about Rs62,000 crore as on 31 March 2024.

Kathpalia’s resignation on Tuesday came after RBI gave a one-year extension to Kathpalia despite the lender seeking a three-year term for him.

“I wish to submit my resignation from the services of the bank in relation to the outgoing derivatives discussion,” Kathpalia wrote in his resignation letter, adding: “I undertake moral responsibility, given the various acts of commission/omission that have been brought to my notice.”

Shares of the lender declined were down 0.3% in intraday trading on Wednesday.

“The bank is taking all necessary steps to ensure stability and continuity of its operations while maintaining high standards of governance,” the statement said.

Kathpalia took charge in March 2020 and acknowledged regulatory unease during his leadership.