IndusInd Bank's deputy CEO Arun Khurana resigns amid accounting blunder

Mumbai/Bengaluru: IndusInd Bank on Monday announced the resignation of deputy CEO Arun Khurana, weeks after the private lender disclosed accounting lapses in its derivatives portfolio that triggered a rout in its shares.

In light of the recent accounting issues related to internal derivative trades, "I having oversight of the Treasury Front office function, as the whole time director, Deputy CEO and a part of senior management of the bank, hereby resign, effective immediately," Khurana wrote in a letter to IndusInd Bank's board that was included in a stock market filing.

IndusInd, India's fifth-largest private lender with a balance sheet of $63 billion, said on Sunday it would take a $229.56 million hit to its accounts for the financial year ended March 31, 2025 because of the incorrect treatment of derivatives going back several years.

Based on the findings of an external agency's probe, IndusInd has estimated an impact of 2.27 per cent on its net worth as of December 2024.

Khurana headed the global markets division of the bank, which included the derivatives portfolio.

IndusInd shares have fallen nearly 8 per cent since March 10, when the lender first disclosed the impact on its net worth from the discrepancies.

Last week, IndusInd named Santosh Kumar as its deputy CFO. Kumar will head the finance and accounts functions till IndusInd appoints a full-time CFO.

The Reserve Bank of India had urged CEO Sumant Kathpalia and Khurana to step down following the accounting lapses, as soon as replacements were found and approved by the central bank, Reuters reported last month.

The bank is due to report earnings for the full financial year before May 15, but is yet to disclose the date for the release.