Business of trust: IndusInd Bank events raise concerns over governance

While the bank has tasked an external agency to review the issues, reports suggest that discrepancy arose on account of derivatives positions taken by the bank to hedge its foreign-exchange exposure

Over the past fortnight, developments at IndusInd Bank have raised several questions regarding internal management and regulatory oversight. First, the bank informed the stock exchanges that the Reserve Bank of India (RBI) had approved the reappointment of its managing director (MD) and chief executive officer (CEO) Sumant Kathpalia only for a year. This was against the bank board’s approval of a three-year term. Interestingly, this was not the first time that the regulator approved a tenure that was shorter than what the board of the bank asked for. The RBI had earlier given a two-year reappointment against the board’s approval