IndusInd Bank CEO Resigns Amid Derivatives Portfolio Scandal

IndusInd Bank's MD and CEO, Sumant Kathpalia, resigned due to accounting lapses in derivatives, affecting the bank financially by Rs 1,960 crore. The bank also announced a committee formation to manage CEO duties temporarily. The lapses impacted the bank's net worth significantly, and internal trading has been discontinued.

In a major shakeup, IndusInd Bank's Managing Director and CEO, Sumant Kathpalia, has resigned with immediate effect following significant accounting lapses in the bank's derivatives portfolio. These lapses have resulted in a financial impact of Rs 1,960 crore.

The bank has decided to form a 'Committee of Executives' to manage the CEO's duties temporarily until a permanent replacement is appointed. Earlier, both the Deputy CEO and the Chief Financial Officer had resigned amid the unfolding scandal.

Investigations revealed that incorrect accounting of internal derivative trades, leading to notional profits, was the root cause of the discrepancies. In response, the bank has ceased all internal derivative trading from April 2024, aligning with RBI guidelines.