At least three top executives may step down in the coming months, including CEO Sumant Kathpalia and Deputy CEO Arun Khurana, who oversaw global markets, including the derivatives portfolio, CNBC-TV18 has learnt a person directly involved in the process.
The board is already working on succession planning, following the RBI’s decision to extend Kathpalia’s term by just one year. According to people familiar with the matter, the RBI has asked the board to begin identifying CEO successors and submit a shortlist of candidates at least four to six months ahead of Kathpalia’s term end in March 2026.
In response to CNBC-TV18’s query on the process of identifying potential CEO candidates and the departure of the three senior executives, an IndusInd Bank spokesperson said, “IndusInd Bank denies any claims of having received such a communication and the Bank does not comment on speculative reports regarding its management.”
An external review by PwC has pegged the negative impact of the derivatives issue at ₹1,979 crore. The financial hit estimate is largely in line with the street estimates and a tad below the bank’s internal assessment as well.
The Mumbai-based private lender had first flagged the issue on March 10, revealing that its internal review had uncovered discrepancies in derivative account balances accumulated over the last 5–7 years.
It initially estimated the impact at 2.35% of its December 2024 net worth. CEO Sumant Kathpalia, in a March 11 interview with CNBC-TV18, had quantified the net post-tax impact at ₹1,520 crore, and gross hit at around ₹1,970 crore.
In its latest disclosure on Tuesday, April 15, IndusInd Bank stated that the negative impact will be ₹1,979 crore, which is 2.27% of its net worth as of December 2024.
“The Bank will appropriately reflect the resultant impact in the financial statements for FY 2024–25 and continue to take suitable steps to augment internal controls relating to derivative accounting operations,” the statement read.
Sources tell CNBC-TV18 that the figure is broadly in line with the Reserve Bank of India’s own assessment of a ₹2,000 crore hit. However, the timeline and manner of disclosure have reportedly raised concerns with the regulator — and could now result in senior-level exits.
During the March 11 interview, CEO Kathpalia had mentioned that this issue was first discovered back in October 2024.
“We found this anomaly around October, and that is when we started our internal assessment and brought in an external agency. At the time, we didn’t know the full extent. We knew that two deals were being accounted incorrectly — but there were many more involved. Once we understood the impact, we called a board meeting and made the disclosure,” he had said back then.
When asked about the impact on earnings, he had added, “The full year will not be a loss at all. And I think Q4 will also be a profit — even after factoring this in.”
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