IndusInd Bank Deputy CEO Resigns Amid Ongoing Issues in Bank, Bank announced his resignation

IndusInd Bank announced on Monday that its Deputy CEO, Arun Khurana, has resigned with immediate effect. His resignation comes shortly after the bank revealed significant accounting mistakes related to its derivatives portfolio. Arun Khurana, who was in charge of the bank’s global markets division, oversaw the derivatives portfolio.

In his resignation letter, Arun Khurana stated, “Given the recent unfortunate events, where the Bank identified an adverse accounting impact on its profit and loss (P&L) due to errors in accounting for internal derivative trades, I, as the Whole Time Director and Deputy CEO, take responsibility. Therefore, I am resigning with immediate effect.” He also mentioned that he would assist in transitioning his responsibilities to ensure a smooth handover.

Indusind Bank has said that action will be taken against People responsible for Loss of approximately Rs.2000 crore.

Accounting Mistakes and Impact on the Bank

IndusInd Bank disclosed that the accounting mistakes related to the derivatives portfolio would lead to a financial loss of Rs 1,960 crore for the financial year 2025. The bank confirmed that an external auditor, appointed by the bank, found that as of March 31, the adverse impact on the P&L stood at Rs 1,959.98 crore, which was close to the amount announced on April 15.

Internal Changes and Actions Taken by the Bank

The bank revealed that, starting April 1, 2024, it has discontinued all internal derivative trades. According to the bank, the primary reason for the accounting errors was the incorrect handling of internal derivative trades, especially in cases of early termination. These errors led to the wrongful recording of notional profits, which caused discrepancies in the bank’s financial records.

The report also looked into the roles of key employees, who were involved in these issues. The bank’s board of directors is now taking steps to hold those responsible accountable and to adjust the roles and responsibilities of senior management accordingly.

Earlier Disclosures of Accounting Issues

On April 15, IndusInd Bank shared a report from an external agency confirming that the accounting errors in the derivative portfolio would negatively impact its net worth by Rs 1,979 crore. The bank assessed that this discrepancy would result in a post-tax negative impact of 2.27% on its net worth by December 2024.

Last month, the bank had already estimated that these accounting lapses would reduce the bank’s net worth by approximately 2.35% by the end of 2024.

The resignation of Arun Khurana comes as a result of significant accounting lapses in the bank’s derivatives portfolio. IndusInd Bank is taking steps to correct these mistakes and ensure proper accountability within its management team.