Mint explanator: Who will manage Indusind Bank without senior leadership?

Copyright © HT Digital Streams Limit all rights reserved. Operation a day after the executive director and deputy CEO of Indusind Bank, Arun Khurana, resigned, his managing director and CEO Sumant Kathpalia also retired. (Reuters) Summary Indusind Bank has been a senior leadership crisis over the past few years, following Yes Bank, RBL Bank, Lakshmi Vilas Bank and Tamilnad Mercantile Bank. On April 29, 2025, Sumant Kathpalia retired as the managing director and CEO of Indusind Bank amid investigations into accounting contradictions in the bank’s derivative portfolio. His resignation comes a day after the executive director and Deputy CEO Arun Khurana also resigned in the investigation. Indusind Bank is the latest private sector shooter to see a senior leadership crisis over the past year, to the Yes Bank, RBL Bank, Lakshmi Vilas Bank and Tamilnad Mercantile Bank. Also read: Indusind Bank Shortlists Executive Search Firm Spencer Stuart for CEO Hunt Mint explains how the Indusind conversion can differ from the management changes seen in other banks, especially those involved in the Reserve Bank of India. How does the Indusind management differ from others? The bank’s board of directors has driven the management change at Indusind Bank by asking the CEO and Deputy CEO to take accountability for the incident and retire from their positions. In the other four cases, the banking regulator replaced the boards and took control of the banks. What is the current status of the Indusind management? The regulator allowed the bank’s board to set up a ‘committee of managers’ to run the money shooter for three months or until a new MD has been appointed, which is earlier. After the resignation of Kathpalia, the bank sought the regulator’s approval for this. The ‘Committee of Managers’ will exist, Consumer Banking and Marketing, and Anil Rao, chief administrative officer. They will oversee the bank’s operations under the supervision and guidance of a Council’s supervisory committee. The supervisory committee will in turn be led by the chairman of the Council and will include the chair of the bank’s audit committee, remuneration and nomination and remuneration committee and the Risk Management Committee. What was the RBI’s attitude about the Indusind crisis? After the March 10 announcement on the accounting decline, the Central Bank issued a statement on March 15, saying the bank was well capitalized and its financial position remained satisfactory. The RBI then said that he had asked the board and management to complete the affirmative action in the March quarter of 2024-25 after making the required revelations to all stakeholders. Also read: Indusind Bank’s Black Box Moment: What investors have to decode before buying the stock. “As such, there is no need for depositors to respond to the speculative reports at this time. The bank’s financial health remains stable and is carefully monitored by the RBI,” the regulator said. The regulator no longer officially said on the crisis. In the post-monetary policy conference on April 9, RBI governor Sanjay MalhoTra said the recent incidents are ‘episodes’ and not ‘total failure’ and that the total banking system is still safe, safe, robust and resilient. He responded to a question about larger systemic problems of incidents at three financial entities-which expired at Indusind Bank, and the failure of the New India Cooperative Bank, based in Mumbai, and Aviom India Housing Finance. How were management changes carried out at other banks? Tamilnad Mercantile Bank: After MD & CEO S. Krishnan resigned in September 2023, citing “personal reasons”, the bank proposed three names as its successor, who rejected the RBI in April 2024. When Krishnan stepped down from Die Post in June 2024, the bank was formed a committee to bring about the bank in August Till Salee Sukumaran was appointed 2024. The RBI appointed general manager Yogesh Dayal as his representative on the board, after which R. Subramaniakumar was appointed as the head of the bank in June 2022. Also read: Indusind Bank Case: Who is India’s real money shooter of the last resort? Lakshmi Vilas Bank: In September 2020, bank shareholders dismissed seven directors, including RBI approved MD and CEO S. Sundar and auditors at the bank’s annual general meeting. The RBI first approved the constitution of a committee of three independent directors to manage the bank’s daily operations. However, as the bank’s financial position continued to deteriorate and capital fell in the negative after two failed merger proposals (with Indiabulls Housing Finance and Clix Capital), the central bank appointed control over the council in November 2020 and appointed TN Manoharan as the administrator. The central bank then forced the bank to merge with the local unit of the biggest lender of Singapore, DBS Bank. Yes Bank: In March 2020, the RBI replaced the board of the bank, referring to a serious decline in its financial position. It locked up the withdrawals of customers at £ 50,000 and imposed restrictions on the bank’s operations, while the re -creation plan under the Yes bank reconstruction scheme, 2020, was completed, a consortium of lenders led by the State Bank of India who served fresh capital in the bank and the appointment of Prashant Kumar as the bank of the bank. Kumar was appointed as the MD and CEO later in July 2022. 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