IndusInd Bank Relieves Arun Khurana From CFO Role Amid Derivative Gap Saga

IndusInd Bank Ltd.'s board has approved relieving Arun Khurana from the additional responsibility of chief financial officer with effect from Thursday, according to an exchange filing.

This change comes amid the private lender being under a regulatory lens for discrepancies in its derivative portfolio.

In place of Khurana, the board approved the elevation of Santosh Kumar as the deputy CFO and special officer of finance and accounts. He will head these functions of the bank with effect from Friday, April 18.

"Mr Santosh Kumar is authorised in such capacity, to head the finance and accounts functions of the Bank till a full time CFO is appointed. The Board thanks Mr. Arun Khurana for discharging additional responsibility of CFO since January 21, 2025 and at the aforesaid meeting, relieved Mr. Khurana from this additional responsibility, with effect from close of business hours on April 17, 2025," the lender said in an exchange filing.

Khurana was given the additional charge of chief financial officer on January 21. Three days prior to this, he was appointed as the deputy chief executive officer and key managerial personnel of the bank.

Khurana's appointment of the CFO had come right after his predecessor Gobind Jain had resigned from the post. The latter stepped down to pursue opportunities outside the bank or within the promoter group after having put in over three years.

Khurana joined the lender in November 2011 and has been the deputy CEO since April 2020. He has also served as overall head of the bank's global markets group.

On Tuesday, the bank informed exchanges that the discrepancies in account balances of its derivative portfolio will have a negative impact of Rs 1,979 crore as of June 2024, according to a report from an external agency tasked with probing the matter.

The bank said that it received the report from the external agency on Tuesday and the impact amounts to 2.27% of its net worth as of December 2024. This is compared to an internal review that had estimated an adverse impact of approximately 2.35%.

As of the end of December, the bank's net worth was Rs 65,102 crore.

The bank said that it will appropriately reflect the resultant impact in the financial statements for the financial year ended March 31.

On March 10, the lender said that it had appointed an external agency in October to ratify its internal review of the derivatives portfolio. NDTV Profit had later reported that this external agency was PwC.

On Mar 21, NDTV Profit had reported that IndusInd Bank's board will need to come up with replacements for Chief Executive Officer Sumant Kathpalia by October.

The bank's board will have to hire a headhunter to get potential CEO names, which it will then review and prepare a shortlist of. It is unclear if only external names will form part of the shortlist or if any internal candidates will be considered. As such, Deputy CEO Arun Khurana is also in charge of the treasury and finance functions at the bank, where the accounting discrepancies have been found.

In early March, RBI had approved the re-appointment of Kathpalia as the managing director and CEO of the bank for another year instead of a three-year term that IndusInd had applied for.

Currently, all eyes are on the outcome of the review of the independent firm, which is reportedly said to have been Grant Thornton, to investigate the accounting policies and find the people responsible for the lapses at the bank.