The Reserve Bank of India (RBI) has approved an interim team to manage IndusInd Bank after the sudden resignation of its Managing Director and CEO, Sumant Kathpalia. The bank shared this news in an official statement on Wednesday.
A temporary “Committee of Executives” has been formed to handle the bank’s day-to-day operations. This committee includes Soumitra Sen, Head of Consumer Banking, and Anil Rao, Chief Administrative Officer. They will work under the guidance of an Oversight Committee of the Board, which will be led by the Chairman of the Board and include heads of the Audit, Compensation, and Risk Management Committees.
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The RBI approved this arrangement in a letter dated April 29, 2025. It will continue until a new MD & CEO is appointed or for up to three months from the date the previous CEO stepped down—whichever happens first.
IndusInd Bank said it asked the RBI for this temporary setup to ensure smooth functioning and proper governance after Kathpalia’s exit.
“The Bank is taking all necessary steps to maintain stability and high governance standards,” the statement added.
Why Did the CEO Resign?
Sumant Kathpalia resigned on Tuesday, just a day after his deputy, Arun Khurana, also stepped down. In his resignation letter, Kathpalia said he was taking “moral responsibility” for problems linked to a derivatives-related issue.
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The issue involves losses from the early termination of derivatives contracts. These were reportedly recorded in a way that wrongly showed profits and misled stakeholders about the bank’s actual financial condition.
Kathpalia, who became CEO in March 2020, admitted that the RBI was not fully confident in his leadership. In a recent call with analysts, he said,
“I think they’re uncomfortable with my leadership… This is a test for the bank and for our succession planning.”
Although he led the bank to significant growth—growing its balance sheet from ₹4.24 lakh crore in March 2020 to ₹5.43 lakh crore by December 2024—his time as CEO also saw several regulatory issues. These included:
- RBI penalties for not following KYC rules
- Incorrect interest payments on deposits
- Unauthorized loans given without customer permission
Despite being given a one-year extension in 2024, the RBI had already shortened his term twice in the past.
