IndusInd Bank is in the spotlight after Deputy CEO Arun Khurana resigned, following the discovery of a significant accounting error related to the bank’s derivatives portfolio. This issue, which dates back six years, has resulted in a $230 million impact on the bank’s financial statements and caused a 2.27% reduction in its net worth as of December 2024.
Khurana, who managed the Treasury Front Office and global markets division, stepped down immediately, taking responsibility for the oversight. To ensure continuity, Santosh Kumar has been named as Deputy CFO until a permanent chief financial officer is appointed.
The Reserve Bank of India (RBI) is reported to have advised both Khurana and CEO Sumant Kathpalia to step down, once appropriate successors are identified. In response to the issue, the bank has halted internal derivative trading since April and begun reinforcing its internal controls and risk management processes.
The bank’s share price has seen a decline of nearly 8% since the news first surfaced in early March, reflecting investor concerns over governance and operational checks. However, despite the setback, IndusInd Bank has expressed confidence that it will still post a profit for the fourth quarter and FY25, backed by its core retail lending strength.
While the long-term impact of the event is yet to be fully measured, this development raises critical questions about oversight, transparency, and internal auditing mechanisms in major banks.