IndusInd Bank CEO Sumant Kathpalia has resigned amid an accounting discrepancy row, according to an exchange filing on Tuesday. The resignation will come into effect immediately, the lender said.
"I undertake moral responsibility, given the various acts of commission/omission that have been brought to my notice. I would request that my resignation be taken on record at close of working hours today," Kathpalia said in the resignation letter, which was attached with the filing.
This comes a day after the bank's deputy CEO Arun Khurana submitted his resignation.
IndusInd Bank has informed the exchanges that it has sought approval of the Reserve Bank of India to constitute a “Committee of Executives” to discharge the duties, roles and responsibilities of the CEO.
Kathpalia was set to leave the bank in March 2026, after the RBI cut his tenure extension to one year, as opposed to the three-year extension sought by the board. His exit puts an end to a crucial chapter in IndusInd Bank's history, where questions on governance were raised.
On March 10, the bank disclosed that it had identified certain accounting discrepancies in its derivatives portfolio. At the time, the estimated financial impact was Rs 1,500-2,000 crore. Later, through an external audit by PwC, it was estimated to be Rs 1,979 crore. An independent investigation initiated by the board on March 20 arrived at a potential impact of Rs 1,960 crore.
The independent investigation found that the accounting discrepancy was due to improper accounting of internal trades at IndusInd Bank. NDTV Profit had reported on March 17 that the bank had likely breached long-standing accounting norms during the accounting for internal trades.
Beyond these accounting discrepancies, the bank has also recently found discrepancies in IndusInd Bank's microfinance portfolio. The bank disclosed on April 22 that it had identified this issue and that the internal audit department at IndusInd Bank was investigating the matter. Global consulting firm EY is supporting the internal audit department in this investigation.
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