IndusInd Bank's Deputy CEO Resigns In The Wake of Accounting Lapses Costing Rs 1,960 Cr

After Deputy CEO Arun Khurana, who was in charge of the bank's treasury front office, resigned due to accounting errors that cost the firm Rs 1,960 crore in the fiscal year that ended in March 2025, IndusInd Bank's shares were up on Tuesday.

Indusind Bank's shares began the day higher on the NSE at Rs 841.95 a share and surged to an intraday high of Rs 852.00, or about 3% gain. With a market value of Rs 65.31KCr, the stock was up 1% at Rs 838.30 a share during the afternoon trade.

"We hereby inform that Mr. Arun Khurana, Whole-time Director (Executive Director) & Dy. CEO, Key Managerial Personnel of the Bank, has by his letter dated April 28, 2025, resigned with immediate effect," said IndusInd Bank in a regulatory filing.

"Considering the recent unfortunate developments, wherein the Bank determined an adverse accounting impact on P&L, on account of incorrect accounting for internal derivative trades, I having oversight of the Treasury Front office function, as the Whole Time Director, Deputy CEO and a part of Senior Management of the bank, hereby resign, effective immediately," said Khurana in his resignation letter sent to the bank's board on Monday.

The private sector lender had previously disclosed that an external auditor chosen by the bank had calculated a cumulative adverse accounting effect on P&L as of March 31 of Rs 1,959.98 crore. The bank announced on March 20, 2025, that the Board of Directors had decided to choose a reputable professional firm to carry out a thorough investigation to determine the underlying reason for the disparities that the bank had revealed on March 10, 2025, find any shortcomings, and establish responsibility in this regard.

On April 26, the IndusInd Bank-appointed independent professional company determined the cumulative unfavorable accounting effect on P&L to be Rs 1959.98 crores as of March 31, 2025. This figure is comparable to the amount revealed on April 15, 2025. According to the report, the main underlying cause of accounting discrepancies is improper accounting of internal derivative contracts, particularly when early termination led to the recording of notional gains.

"The Board is taking necessary steps to fix accountability of the persons responsible for these lapses and re-align roles and responsibilities of senior management," said IndusInd Bank in a regulatory filing.

"The Bank will appropriately reflect the resultant impact of the accounting discrepancies in the financial statements for FY 2024-25 and take measures to strengthen internal controls accordingly. The Bank has already discontinued internal derivative trades from 1st April 2024," IndusInd Bank informed stock exchanges.

"Lastly, I would like to take this opportunity to thank and appreciate the Board in believing and entrusting me with responsibilities through my career with the Bank and I wish the Bank all the best for the future," his resignation letter highlighted on Monday.

Due to disparities in derivatives transactions, the bank had disclosed that 2.35 percent of the bank's net value as of December 2024 was negatively impacted by the accounting errors in the derivative portfolio, which the private sector lender revealed last month.