Leadership Shakeup at IndusInd Bank

In a surprising turn of events, Sumant Kathpalia, the Managing Director and CEO of IndusInd Bank, has resigned with immediate effect. This decision comes in the wake of uncovered derivative losses, with Kathpalia citing "moral responsibility" as the reason for his sudden departure.

Series of Resignations Rock the Bank

Kathpalia's exit follows closely on the heels of Ajay Khurana, the bank's Deputy Chief Executive, who also resigned, taking responsibility for lapses in the accounting of derivatives trades. Earlier in January, Gobind Jain, the CFO, had stepped down, which is now being linked to the same irregularities.

Financial Fallout and Forensic Review

A forensic review, reportedly conducted by Grant Thornton, estimated the bank's losses at nearly Rs 2,000 crore. These financial discrepancies, stemming from internal derivative trades, have raised concerns about the bank's fourth-quarter results and its microfinance portfolio's existing pressures.

Looking Ahead

IndusInd Bank has reached out to the Reserve Bank of India (RBI) for approval to form a temporary committee to oversee operations during this transitional period. Despite the turmoil, the bank's shares saw a nearly 1% increase on Tuesday.