IndusInd Bank CEO Sumant Kathpalia Resigns Over Rs 1,960 Crore Accounting Lapse

Sumant Kathpalia, Managing Director and CEO of IndusInd Bank, resigned on Tuesday with immediate effect, following the revelation of major accounting lapses that cost the private sector lender nearly Rs 1,960 crore in the financial year 2024–25.

In a regulatory filing, the bank confirmed that Kathpalia submitted his resignation through a letter dated April 29, stating his decision to step down at the close of business hours the same day. "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 wrote in his letter addressed to the board.

The resignation comes amid ongoing scrutiny of the bank's accounting practices, particularly within its derivatives portfolio. An external audit commissioned by the bank recently concluded that the cumulative adverse impact on profit and loss stood at Rs 1,959.98 crore as of March 31, 2025, a figure consistent with preliminary estimates released on April 15.

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Potential Hit To Bank's Net Worth

Earlier, another independent review had projected a potential hit of Rs 1,979 crore to the bank’s net worth due to the discrepancies, translating to an estimated 2.35 per cent erosion as of December 2024. The bank later revised the figure slightly to a 2.27 per cent impact after tax.

The crisis has triggered a broader shake-up at the senior management level. Deputy CEO Arun Khurana stepped down a day before Kathpalia, and Chief Financial Officer Govind Jain resigned earlier in January, prior to the issue becoming public.

In response to the leadership vacuum, the board has sought approval from the Reserve Bank of India to establish a 'Committee of Executives' to manage the CEO’s responsibilities temporarily until a permanent appointment is made.

The resignations mark a turbulent phase for IndusInd Bank, as it works to restore investor confidence and strengthen governance standards.

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