The Reserve Bank of India (RBI) may favor a public sector banker to replace IndusInd Bank’s current MD & CEO, Sumant Kathpalia, according to industry sources. Recently, RBI approved Kathpalia’s reappointment for only one year (March 24, 2025 – March 23, 2026), despite the bank’s board seeking a three-year term.
IndusInd Bank has been facing challenges, including a ₹1,500 crore impact on its balance sheet due to discrepancies in its derivatives portfolio, concerns over the microfinance loan quality, and the RBI’s decision to grant a shorter tenure to the CEO. Sources say that while approving Kathpalia’s extension, the RBI also asked the bank’s board to suggest three to four candidates for the top position.
Experts believe that an internal candidate is unlikely to be favored, considering recent trends in private sector bank appointments. Additionally, the RBI is reportedly reviewing insider trading data related to IndusInd Bank over the past few years.
Currently, several private sector banks are led by former public sector bank executives, reflecting the RBI’s trust in their leadership. These include:
- YES Bank – Prashant Kumar (Former Deputy MD, SBI)
- Karur Vysya Bank – B Ramesh Babu (Former Deputy MD, SBI)
- RBL Bank – R Subramaniakumar (Former MD & CEO, Indian Overseas Bank)
- Tamilnad Mercantile Bank – Salee Sukumaran Nair (Former Deputy MD, SBI)
- Jammu & Kashmir Bank – Amitava Chatterjee (Former Deputy MD, SBI)
- Bandhan Bank – Partha Pratim Sengupta (Former Deputy MD, SBI & MD & CEO, Indian Overseas Bank)
- Ujjivan Small Finance Bank – Sanjeev Nautiyal (Former Deputy MD, SBI)
These appointments suggest that the RBI values the leadership experience of senior public sector bankers in guiding private banks.
