IndusInd Bank Faces Executive Resignations Amid Accounting Lapses

IndusInd Bank Limited, a prominent player in the Indian banking sector, has recently faced significant management changes following revelations of accounting lapses. The bank, which operates across various segments including Treasury, Corporate/Wholesale Banking, and Retail Banking, has seen its share price fluctuate amid these developments.

Executive Resignations

On April 29, 2025, Sumant Kathpalia, the CEO and Managing Director of IndusInd Bank, resigned with immediate effect. Kathpalia cited “moral responsibility” for “various acts of commission/omission” following the discovery of accounting lapses that resulted in a substantial financial impact. This resignation marks a significant shift in the bank’s leadership, as Kathpalia was the second top executive to step down in light of these issues.

Earlier, on April 28, Arun Khurana, the Deputy CEO of IndusInd Bank, also resigned following the disclosure of accounting lapses in the bank’s derivatives portfolio. These lapses have had a notable impact on the bank’s financial standing, with a reported ₹1,959.98 crore effect.

Financial Impact and Market Reaction

The accounting issues have led to a sharp decline in the bank’s net worth and triggered a rout in its shares. Despite these challenges, IndusInd Bank’s stock showed resilience, spurring 0.75% and marking five straight sessions of gains as of April 29. The broader market also reflected optimism, with the Sensex and Nifty indices opening higher on the same day.

Bank’s Response

In response to the accounting lapses, IndusInd Bank has moved to address and rectify the internal control deficiencies. The bank’s Board of Directors has appointed an independent professional firm to investigate the issues, with a report submitted on April 26, 2025. The bank is committed to fixing these lapses and restoring stakeholder confidence.

Market Outlook

As the bank navigates through these challenges, investors and market analysts are closely monitoring its recovery efforts. The recent executive changes and the bank’s proactive measures to address the accounting issues are key factors influencing its market performance.

IndusInd Bank’s journey through this period of turbulence will be critical in determining its future trajectory in the competitive banking sector.