The Reserve Bank of India has approved the formation of an interim “Committee of Executives” to oversee the operations of IndusInd Bank in the absence of a Managing Director and Chief Executive Officer (MD&CEO), the bank announced in a regulatory filing on Wednesday.
The committee, comprising Soumitra Sen (Head – Consumer Banking) and Anil Rao (Chief Administrative Officer), will manage the bank’s day-to-day affairs under the supervision of an Oversight Committee of the Board. This Oversight Committee will be chaired by the Chairman of the Board and will include the chairs of the Audit Committee, the Compensation and Nomination & Remuneration Committee, and the Risk Management Committee.
According to the bank, this interim arrangement has been approved by the RBI via a letter dated April 29, 2025, and will remain in place until a new MD&CEO takes charge or for a period of three months from the date of the previous CEO’s departure—whichever is earlier.
IndusInd Bank clarified that it had formally approached the RBI seeking approval for such a transitional mechanism to ensure business continuity and governance standards following the end of the outgoing CEO’s tenure.
"The Bank is taking all necessary steps to ensure stability and continuity of its operations while maintaining high standards of governance," the statement said.
CEO Sumant Kathpalia's exit amid derivatives crisis
IndusInd Bank’s Managing Director and CEO, Sumant Kathpalia, resigned on Tuesday. His resignation follows that of his deputy, Arun Khurana, who stepped down a day earlier.
“I wish to submit my resignation from the services of the Bank in relation to the ongoing derivatives discussion,” Kathpalia wrote in his letter. “I undertake moral responsibility, given the various acts of commission and omission that have been brought to my notice.”
The derivatives-related losses were reportedly caused by flawed accounting of prematurely terminated contracts, which led to inflated notional profits and misrepresented the true financial health of the bank’s portfolio.
Kathpalia, who took charge in March 2020, had earlier acknowledged regulatory unease regarding his leadership. In an analyst call, he remarked: “I think they’re uncomfortable with my leadership in running the bank, and we have to respect that... This is a test for the bank, as well as for succession planning.”
Despite driving significant growth—expanding the balance sheet from Rs 4.24 lakh crore in March 2020 to Rs 5.43 lakh crore by December 2024—his tenure was marked by multiple regulatory setbacks. These included RBI penalties for non-compliance with KYC norms, deposit interest rate violations, and an incident in which the bank disbursed tens of thousands of loans without customer consent.
While the RBI had granted Kathpalia a one-year extension in 2024, it had previously shortened his term on two occasions.
The committee, comprising Soumitra Sen (Head – Consumer Banking) and Anil Rao (Chief Administrative Officer), will manage the bank’s day-to-day affairs under the supervision of an Oversight Committee of the Board. This Oversight Committee will be chaired by the Chairman of the Board and will include the chairs of the Audit Committee, the Compensation and Nomination & Remuneration Committee, and the Risk Management Committee.
According to the bank, this interim arrangement has been approved by the RBI via a letter dated April 29, 2025, and will remain in place until a new MD&CEO takes charge or for a period of three months from the date of the previous CEO’s departure—whichever is earlier.
IndusInd Bank clarified that it had formally approached the RBI seeking approval for such a transitional mechanism to ensure business continuity and governance standards following the end of the outgoing CEO’s tenure.
"The Bank is taking all necessary steps to ensure stability and continuity of its operations while maintaining high standards of governance," the statement said.
CEO Sumant Kathpalia's exit amid derivatives crisis
IndusInd Bank’s Managing Director and CEO, Sumant Kathpalia, resigned on Tuesday. His resignation follows that of his deputy, Arun Khurana, who stepped down a day earlier.
“I wish to submit my resignation from the services of the Bank in relation to the ongoing derivatives discussion,” Kathpalia wrote in his letter. “I undertake moral responsibility, given the various acts of commission and omission that have been brought to my notice.”
The derivatives-related losses were reportedly caused by flawed accounting of prematurely terminated contracts, which led to inflated notional profits and misrepresented the true financial health of the bank’s portfolio.
Kathpalia, who took charge in March 2020, had earlier acknowledged regulatory unease regarding his leadership. In an analyst call, he remarked: “I think they’re uncomfortable with my leadership in running the bank, and we have to respect that... This is a test for the bank, as well as for succession planning.”
Despite driving significant growth—expanding the balance sheet from Rs 4.24 lakh crore in March 2020 to Rs 5.43 lakh crore by December 2024—his tenure was marked by multiple regulatory setbacks. These included RBI penalties for non-compliance with KYC norms, deposit interest rate violations, and an incident in which the bank disbursed tens of thousands of loans without customer consent.
While the RBI had granted Kathpalia a one-year extension in 2024, it had previously shortened his term on two occasions.
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