Kathpalia, who assumed charge in March 2020, took “moral responsibility” of the latest developments, and stepped down just a day after Deputy CEO Arun Khurana resigned as well.
“I undertake moral responsibility, given the various acts of commission/ omission that have been brought to my notice,” Kathpalia wrote in his resignation.
This also confirms a CNBC-TV18 newsbreak that the derivatives discrepancies saga may lead to three high profile exits at the bank. The news took the bank’s shares to new lows. However, the stock has recovered more than 40% from those lows.
In light of Kathpalia stepping down, the bank sought the RBI’s approval to constitute a committee of executives to discharge duties, roles and responsibilities of a CEO for an interim period, till a permanent CEO is appointed. The central bank granted them the permission on Tuesday evening.
The committee of executives will comprise of Soumitra Sen, who is the Head of Consumer Banking and Anil Rao, who is the Chief Administrative Officer. They will carry out the operations of the bank under the oversight and guidance of an oversight committee, which will be chaired by the IndusInd Bank board chairman, and will comprise of the chairs of the audit committee, the compensations and nomination & remuneration committee and the risk management committee as members.
The committee of executives will be in place for a three-month period from the date of relieving of Kathpalia or the appointment of a new MD & CEO, whichever is earlier.
“IndusInd Bank is taking all necessary steps to ensure stability and continuity of its operations, while maintaining high standards of governance,” the lender said in an exchange filing.
Shares of IndusInd Bank ended 0.8% higher on Tuesday at ₹837.5, a significant recovery from the 52-week low of ₹606 that the lender had declined to in March. The stock is up 23% in the last one month.
