Mint Explainer: Who will run IndusInd Bank without senior leadership?
Sumant Kathpalia stepped down as IndusInd Bank's managing director and chief executive on 29 April 2025 amid investigations into accounting discrepancies in the bank's derivatives portfolio.
His resignation came a day after executive director and deputy CEO Arun Khurana, also involved in the probe, resigned.
IndusInd Bank is the latest private sector lender to witness a senior leadership crisis, following Yes Bank, RBL Bank, Lakshmi Vilas Bank, and Tamilnad Mercantile Bank in recent years.
Mint
explains how the IndusInd changeover might be different from management changes seen at other banks, especially those involving the Reserve Bank of India.
The bank's board has driven the management change at IndusInd Bank by asking the CEO and the deputy CEO to take accountability for the incident and step down from their positions. In the other four cases, the banking regulator superseded the boards and took control of the banks.
The regulator has allowed the bank's board to set up a 'committee of executives' to run the lender for three months or until a new MD is appointed, whichever is earlier. The bank had sought the regulator's approval for this after Kathpalia's resignation.
The 'committee of executives' will comprise Soumitra Sen, head of consumer banking and marketing, and Anil Rao, chief administrative officer. They will oversee the bank's operations under the oversight and guidance of an oversight committee of the board. The oversight committee, in turn, will be headed by the board's chairman and will include the chairs of the bank's audit committee, compensation and nomination and remuneration committee, and the risk management committee.
Following the 10-March disclosure about the accounting lapses, the central bank issued a statement on 15 March, saying the bank is well-capitalised and its financial position remains satisfactory. The RBI then said it had asked the board and management to complete the remedial action in the March quarter of 2024-25 after making the required disclosures to all stakeholders.
'As such, there is no need for depositors to react to the speculative reports at this juncture. The bank's financial health remains stable and is being monitored closely by the RBI," the regulator had said.
The regulator has not said anything more officially on the crisis.
In the post-monetary policy conference on 9 April, RBI governor Sanjay Malhotra said the recent incidents were 'episodes" and not 'total failure" and that the overall banking system continues to be safe, secure, robust, and resilient.
He was responding to a question on larger systemic concerns from incidents at three financial entities—accounting lapses at IndusInd Bank, and the failure of the Mumbai-based New India Cooperative Bank and Aviom India Housing Finance.
Tamilnad Mercantile Bank:
After MD & CEO S. Krishnan resigned in September 2023, citing 'personal reasons", the bank proposed three names as his successor, which the RBI rejected in April 2024. As Krishnan stepped down from the position in June 2024, the bank formed a committee to run the bank's operations till Salee Sukumaran Nair was appointed the head of the bank in August 2024.
RBL Bank:
In December 2021, MD and CEO Vishwavir Ahuja stepped down as the head of the bank as it faced rising losses and deteriorating asset quality. The RBI appointed chief general manager Yogesh Dayal as its representative on the board, following which R. Subramaniakumar was appointed the head of the bank in June 2022.
Lakshmi Vilas Bank:
In September 2020, shareholders of the bank ousted seven directors, including the RBI-approved MD & CEO S. Sundar and auditors at the bank's annual general meeting. The RBI first approved the constitution of a committee of three independent directors to manage the bank's day-to-day operations.
However, as the bank's financial position continued to deteriorate and capital fell in the negative following two failed merger proposals (with Indiabulls Housing Finance and Clix Capital), the central bank in November 2020 seized control of the board, appointing T.N. Manoharan as the administrator. The central bank then forced the bank to merge with the local unit of Singapore's largest lender, DBS Bank.
YES Bank:
In March 2020, the RBI superseded the bank's board, citing a serious deterioration in its financial position. It capped customer withdrawals at
₹
50,000 and imposed restrictions on the bank's operations while finalising the recast plan under the Yes Bank Reconstruction Scheme, 2020.
The scheme involved a consortium of lenders led by State Bank of India infusing fresh capital into the bank and the appointment of Prashant Kumar as the bank's administrator. Kumar was later appointed as the MD and CEO in July 2022.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
40 minutes ago
- Time of India
Panbazar road overbridge to be ready by July: NFR
Guwahati: Construction of the Panbazar road overbridge (ROB), which began last year, is expected to be completed by July, Northeast Frontier Railway (NFR) officials said. The bridge is likely to ease traffic congestion in the Paltan Bazar and Panbazar areas, two of the city's oldest cosmopolitan areas. Tired of too many ads? go ad free now "As of now, concretisation work on the bridge's approaches is going on. But most of the work has been completed, including laying the foundational structures, significant fabrications, and placing the bow string girders. Advanced sub-soil strengthening through geo-cell technology has also been completed. The project is expected to be complete by July this year," said Kapinjal Kishore Sharma, chief public relations officer, NFR. The construction work of the ROB has not been progressing on a smooth note. The CPRO said the presence of the fire brigade station posed a challenge in the stacking of construction materials, limiting workspace efficiency. Approximately Rs 48 crore in cost, the project was undertaken by a Kolkata-based construction company to facilitate the smooth movement of the electric locomotives as part of the NFR's ongoing electrification process, where high-voltage lines have been installed. However, the old ROB, which was built in 1965, had turned into a 'dead wire zone'. The area under the bridge was a neutral point, and since it was not charged, it restricted the speed permanently to 15 km/h. As a result, locomotives approaching Guwahati railway station failed to maintain the required momentum, causing them to halt in that area. "Waterlogging also used to be a recurring challenge, especially during heavy rains, causing signal failures and disruptions. Tired of too many ads? go ad free now With the necessary adjustments to this project, the lifted track levels will prevent waterlogging, ensuring smooth operations even during monsoons," Sharma said. He added that the new ROB will aim to address the limitations of its predecessor while introducing significant enhancements. With a span of 60 meters, it will provide improved vertical and horizontal clearance. It will also feature a three-lane wide road replacing its two-lane limitations, which will increase its capacity to handle higher volumes of road traffic as well, thus ensuring a smoother transportation system for commuters.
Time of India
40 minutes ago
- Time of India
When Dr Radhakrishnan gave away degrees under tent at IIT-Kanpur
Lucknow: When RBI governor, Sanjay Malhotra, returns to his alma mater, IIT-Kanpur, on June 23 to address the premier institute's 58th convocation at its sprawling auditorium, the event will mark the institute's memorable journey from its humble beginnings. Tired of too many ads? go ad free now The institute's first convocation was held under a tent in 1965 and addressed by the then President of India, . The event saw 66 members of the institute's first graduating class conferred the BTech degrees. Dr PK Kelkar, founder director of IIT-K, presided over the function and gave a report on the growth and prospects of the institute. Among the many speeches on the occasion, Kelkar's was the most memorable. IIT-K has come a long way since its inception in 1959. From its humble beginnings in a borrowed room at Harcourt Butler Technological Institute, it has grown to become a premier institution, now situated on a sprawling 420-hectare campus located on the Grand Trunk Road, around 15km west of Kanpur city. Land for the institute was gifted by the govt of Uttar Pradesh in 1960 and, by March 1963, it had shifted to its current location. Today, IIT-Kanpur is renowned for its academic excellence, research, and innovation. A visit to the campus back then would have revealed a serene landscape featuring standing crops, acacia woods, a picturesque line of stately mango trees, flocks of peafowl roaming freely, and a quintessential Indian countryside scene. This idyllic setting made a perfect blend of natural beauty and rustic charm. The campus is designed with a focus on environmental freedom, featuring halls of residence, faculty and staff houses, and community buildings. Tired of too many ads? go ad free now All these are strategically arranged around the central academic area to facilitate flexibility in movement and easy communication. The institute's inaugural batch, the Class of 65, produced some illustrious technocrats and business honchos in the country like Abhay Bhushan, a computer scientist who has been a major contributor to the development of the internet TCP/IP architecture and is the author of the File Transfer Protocol, Suresh Pandey (former director, Bokaro Steel Plant), and Vinay Kumar Modi (Director of Modi Industries Limited). The batch members recall how they departed from the campus in May 1965 and were waiting to hear when the convocation would be held. Finally, they received invitations by India Post. By then many batchmates had left for studies abroad and some of the ones in India could not attend because of work or personal issues. A few of them, though, did make it to Kanpur to receive their degrees. IIT-K made arrangements for them to be picked up at the railway station and they were lodged at the Visitors' Hostel. Abhay Bhushan, chairman of Asquare Inc and part of IIT-K's 1965 batch, reminisces: "The convocation was planned for the afternoon, from 3pm to 5.30pm. We, the graduating students, were asked to arrive by 1.30pm to collect our gowns and caps and to get instructions on walking in the procession. In all, 67 BTech and 5 PhD degrees were awarded." "During the convocation, several speeches were given. Of note was Dr Kelkar's speech where he recalled what we, as the pioneer batch, had been through and how we were better educated to handle whatever our profession and life may have to offer. He said that the faith that they have shown in the future of the institute has been a real source of inspiration," Bhushan said. The Class of 1965 gifted IIT-K Rs 2.5 crore during its Diamond Jubilee Reunion celebrations in March. The batch pledged this amount towards creating a "Pioneering Research and Innovation Award" at the institute. Talking to TOI, the institute's present director, Professor Manindra Agrawal, said: "This year, we are celebrating the 58th convocation. Over the years, the institute has come a long way in contributing to the nation's technology and innovation landscape, as well as shaping bright minds. As an alumnus myself, every convocation here is nostalgic."
Time of India
40 minutes ago
- Time of India
ICICI sought to acquire HDFC, reveals chairman Deepak Parekh
Former HDFC chairman Deepak Parekh and ICICI Bank chief Chanda Kochhar MUMBAI: Former HDFC chairman Deepak Parekh, in a candid disclosure, said that then ICICI Bank chief Chanda Kochhar had proposed a merger between the two lenders - well before HDFC's eventual reverse merger with its banking subsidiary. During an interaction with Kochhar on her channel, Parekh said: "I remember you talking to me once. I remember it very clearly. It's never been talked about in public, but I'm willing to share it now. You said that ICICI started HDFC. 'Why don't you come back home?' That was your offer." Parekh said he declined the offer, saying "it won't be fair" or "proper with our name and the bank and all". Parekh said the eventual merger with HDFC Bank, completed in July 2023, was driven mainly by regulatory pressure. RBI had classified NBFCs like HDFC, then holding assets over Rs 5 lakh crore, as systemically important, breaching the Rs 50,000-crore threshold. "RBI supported us and they pushed us into it to some extent and they helped us," he said. However, he added that there were "no concessions, no relief, no time, nothing". Describing the day the merger concluded, Parekh called it "a sad day and a happy day". He said, "It's good for the institution. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 180k traders turn to IC Markets for optimum CFD trading conditions IC Markets Sign Up Undo It's good for the country to have large banks. Look at how large Chinese banks are. We have to be bigger, larger in India." Parekh believes that Indian banks must grow through acquisitions to become stronger in future. On broader economic concerns, Parekh cited persistent uncertainty in supply chains, trade policy, and export conditions as top CEO concerns. Calling insurance the "least understood product", Parekh criticised "mis-selling by banks" driven by high upfront commissions. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
