Sumant Kathpalia, a veteran banker with over 30 years of experience, resigned as managing director and CEO of IndusInd Bank on April 29, 2025. His resignation followed the discovery of significant accounting anomalies in the bank’s derivatives portfolio, leading to estimated losses of about ₹1,960 crore (about $230
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million). Kathpalia took moral responsibility for these lapses, which were due to years of aggressive profit-seeking and inadequate internal controls.
Before his resignation, the Reserve Bank of India (RBI) had approved only a one-year extension to Kathpalia’s tenure, while the bank’s board had recommended a three-year term. This decision was seen as a sign of RBI’s concerns about the bank’s governance and risk management practices.
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In response, the RBI approved the formation of an executive committee to oversee the bank’s operations. This committee includes consumer banking officer Anil Rao. And further construction is being done
Kathpalia’s career at IndusInd Bank spanned over 12 years, during which he played a pivotal role in expanding the bank’s consumer banking division. Before joining IndusInd, he held senior positions at global banks such as
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Citibank, Bank of America, and ABN AMRO. He is a Chartered Accountant and holds a B.Com (Hons.) degree from Hindu College, Delhi University.
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1: The Rise of Sumant Kathpalia
Overview of Kathpalia’s background: education, early career at Citibank, Bank of America, ABN AMRO
His entry into IndusInd Bank and contributions, especially in consumer banking
Appointment as MD & CEO in 2020 and vision for the bank
2: The Growth Years at IndusInd
Key milestones during his leadership
Aggressive strategies in retail and digital banking
How the bank performed under his tenure (profit, market expansion, etc.)
3: Cracks Beneath the Surface
Internal murmurs about risk management and compliance issues
RBI’s cautious stance: approval of only a 1-year extension in 2024
Early signs of trouble in the derivatives book
4: The Derivatives Debacle
Details of the accounting lapses and ₹1,960 crore loss
What went wrong: inadequate controls, misreporting, or oversight?
Market reaction and stock performance post-disclosure
5: The Resignation and Fallout
Kathpalia’s resignation and public statement
RBI’s intervention and formation of interim executive committee
Boardroom dynamics and ongoing investigations
6: IndusInd—and Indian Banking
Broader implications for risk governance in private banks
RBI’s increasing oversight and regulatory tightening
Lessons in leadership, transparency, and accountability
