RBI approves interim leadership team after IndusInd CEO Kathpalia quits

IndusInd Bank CEO Sumant Kathpalia resigned after audit firm Grant Thornton found nearly ₹2,000 crore in losses related to the bank's derivatives portfolio

The Reserve Bank of India (RBI) has approved the formation of a temporary leadership team at IndusInd Bank, following the abrupt resignation of its Managing Director and Chief Executive Officer, Sumant Kathpalia.

 

In a regulatory filing submitted on Wednesday, IndusInd Bank announced that the RBI, through a letter dated April 29, 2025, has formally sanctioned the creation of a “Committee of Executives” to manage the bank’s operations during the transitional period.

 

This comes a day after Sumant Kathpalia stepped down, accepting “moral responsibility” for what he described as multiple failings brought to light during an internal review. 

Soumitra Sen and Anil Rao to oversee IndusInd operations

The interim executive team will include Soumitra Sen, head of consumer banking, and Anil Rao, chief administrative officer. Both executives will collectively discharge the duties typically performed by the CEO until a permanent successor is appointed or for a maximum period of three months from the date of Kathpalia’s departure, whichever comes first, the bank said. 

 

Oversight committee formed to support CEO transition

The new leadership structure will function under the guidance of an ‘Oversight Committee’ drawn from the bank’s board of directors. This supervisory group will be chaired by the board chairman and include the heads of the audit committee, the compensation and nomination & remuneration committee, and the risk management committee.

 

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

 

Grant Thornton audit reveals ₹2,000 crore derivatives loss

Sumant Kathpalia resigned on Tuesday following the completion of an investigation by audit firm Grant Thornton, which was engaged to examine the source of the accounting discrepancies. The probe revealed losses amounting to nearly ₹2,000 crore related to the bank’s derivatives portfolio. 

 

Sumant Kathpalia resigns, accepts ‘moral responsibility’

In his resignation letter, Kathpalia expressed his intention to accept moral accountability for both direct and indirect failures associated with the matter.

 

Kathpalia’s term had only recently been extended by the RBI for one year in March 2025, despite the bank’s board having cleared him for a full three-year extension. This marked the second consecutive instance in which the central bank opted for a shorter tenure — a move which Kathpalia had previously suggested might have been influenced by concerns regarding the bank’s handling of its derivatives book. 

 

Deputy CEO Arun Khurana also resigns amid derivatives probe

Deputy CEO Arun Khurana also stepped down earlier this week in connection with the same issue.