RBI Approves Interim Executive Committee to Lead IndusInd Bank During Leadership Transition.
Appointment
In April 2025, the Reserve Bank of India (RBI) approved the formation of an interim "Committee of Executives" to manage the operations of Mumbai-based IndusInd Bank Limited. This temporary arrangement is set to last up to three months or until a new Chief Executive Officer (CEO) is appointed, following the resignation of the bank’s Managing Director (MD) and CEO, Sumant Kathpalia.
- The RBI's decision was prompted by the discovery of serious accounting discrepancies within the bank’s derivatives portfolio, raising concerns about governance and financial integrity. These discrepancies significantly impacted the bank's financial reporting, warranting immediate regulatory intervention.
- The newly formed interim committee includes key senior executives from within the bank. Soumitra Sen, currently serving as the Head of Consumer Banking, and Anil Rao, the Chief Administrative Officer (CAO), will lead day-to-day operations during this transitional period.
- The operations of the interim executive committee will be monitored by an Oversight Committee of the Board. This committee is chaired by Sunil Mehta, Chairman of the Board of IndusInd Bank, and comprises the heads of the Audit Committee, the Compensation and Nomination & Remuneration Committee, and the Risk Management Committee.
Main Point :- (i) The Oversight Committee is tasked with ensuring continued stability and sound governance within the bank. Its role became especially critical after internal audits revealed accounting mistakes, including a major discrepancy of Rs. 1,959.98 crore in the profit and loss statement due to mismanagement of internal derivative transactions.
(ii) Leadership changes began on April 28, 2025, when IndusInd Bank's Deputy CEO and Whole-time Director, Arun Khurana, resigned. His resignation came in direct response to the findings surrounding the accounting irregularities.
(iii) Following this, CEO Sumant Kathpalia also stepped down, accepting moral responsibility for the lapses. The discrepancies were brought to light through an external agency's investigation, which reported a cumulative negative impact of Rs. 1,959.98 crore on the bank’s Profit and Loss (P&L) account as of March 31, 2025.
About IndusInd Bank Limited
Established : 1994
Headquarters : Mumbai
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