Sumant Kathpalia Steps Down as IndusInd Bank CEO & MD Over Derivatives Accounting Lapses

Sumant Kathpalia has resigned as Managing Director and CEO of IndusInd Bank with effect from the close of business hours on April 29, 2025. In his resignation letter, he cited the ongoing issue related to the accounting of internal derivative trades and said he was stepping down, taking moral responsibility.

Accounting Discrepancy and Impact

IndusInd Bank had earlier disclosed accounting discrepancies in its internal derivatives portfolio. An external forensic review conducted by Grant Thornton reported a cumulative impact of ₹1,960 crore on the bank’s profit and loss account. 

A separate review estimated the hit to the bank’s net worth at 2.27% as of December 2024. The bank said it would reflect the impact in its FY25 financials and stopped all internal derivative trades from April 1, 2024.

Deputy CEO Also Steps Down

One day before Kathpalia’s resignation, Arun Khurana resigned from his role as whole-time director and deputy CEO. He referred to the adverse accounting impact identified by the bank and noted his oversight of the treasury front office. Khurana was also serving as interim CFO after Gobind Jain resigned in January 2025. Santosh Kumar, the bank’s chief accountant, was appointed as special officer for finance and accounts on April 18, until a full-time CFO is hired.

Board Actions and Interim Arrangements

The bank’s board has sought approval from the Reserve Bank of India to form a committee of executives to manage CEO duties temporarily. This is under Section 10B(9) of the Banking Regulation Act, which permits banks to make interim arrangements for up to four months.

Read more: IndusInd Bank Share Price Drops 6% Amid Forensic Audit Over ₹600 Crore Discrepancy.

Market Reaction

As of 9:24 AM on April 30, 2025, IndusInd Bank share price was trading at ₹819.55, down 2.08%. The stock has declined 20.66% over the past six months and 44.75% over the past year.

Conclusion

With senior-level exits and regulatory attention, IndusInd Bank is managing its operations through interim measures while addressing internal control issues linked to the derivatives accounting matter.

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