Executive Resignation Over Accounting Discrepancies

In a significant development at IndusInd Bank, Deputy CEO Arun Khurana has resigned with immediate effect. This decision comes in the wake of a nearly Rs 2,000-crore impact attributed to derivative trade accounting lapses. The bank officially announced Khurana's departure through a recent filing, marking a pivotal moment in its corporate governance.

Investigation Unveils Financial Mismanagement

An independent investigation initiated in March 2025 revealed an adverse accounting impact of Rs 1,960 crore as of March 31. The findings, which were presented to the board over the weekend, highlighted incorrect accounting practices for internal derivative trades. Khurana, in his resignation letter, acknowledged his oversight responsibilities and chose to step down, emphasizing his commitment to a smooth transition.

The Root of the Problem

The financial discrepancies originated from internal derivative trades between the bank's asset-liability management desk and the treasury. A mismatch in accounting methods—accrual accounting for internal trades versus mark-to-market for external counterparties—allowed the bank to defer losses internally while prematurely booking gains externally. This practice led to an overstatement of the bank's earnings.