IndusInd Bank CEO Sumant Kathpalia resigns as CEO & MD amid accounting blunder

New Delhi: IndusInd Bank MD and CEO Sumant Kathpalia on Tuesday resigned with immediate effect in the wake of accounting lapses costing Rs 1,960 crore to the lender in the 2024-25 fiscal year.

Kathpalia, Managing Director & CEO, has by his letter dated April 29, 2025, resigned from services of the bank with effect from the close of working hours on April 29, 2025, IndusInd Bank said in a regulatory filing.

"I undertake moral responsibility, given the various acts of commission/omission that have been brought to my notice. I would request that my resignation be taken on record at close of working hours today," Kathpalia said in resignation letter addressed to the board of the bank.

The board has sought approval of the Reserve Bank of India to constitute a 'Committee of Executives', to discharge the duties, roles and responsibilities of the Chief Executive Officer (CEO) of the bank, for an interim period until a permanent CEO is appointed by the bank, the filing said.

The bank's Deputy CEO Arun Khurana had tendered his resignation on Monday. Prior to this, another key Managerial Personnel Chief Financial Officer (CFO) Govind Jain quit in January before the incidence came to light.

Earlier this week, the private sector lender had informed that a bank-appointed external auditor has determined a cumulative adverse accounting impact on P&L at Rs 1,959.98 crore as on March 31, which is similar to the amount disclosed on April 15.

On April 15, IndusInd Bank disclosed the basis report of another external agency that accounting lapses in the derivative portfolio will have a negative impact of Rs 1,979 crore on its net worth.

The bank has assessed an adverse impact (on a post-tax basis) of 2.27 per cent to its net worth as of December 2024 on account of discrepancies relating to derivative deals.

The private sector lender reported last month the accounting lapses in the derivative portfolio, estimated to have an adverse impact of approximately 2.35 per cent of the bank's net worth as of December 2024.