In a significant move to stabilize its financial leadership, IndusInd Bank has appointed Santosh Kumar as the new Deputy Chief Financial Officer (CFO), effective April 18, 2025. This appointment comes at a crucial time when the bank is under intense scrutiny from the Reserve Bank of India (RBI) due to accounting discrepancies in its derivatives portfolio.
The bank's financial reporting has been under the spotlight following the discovery of a 2.27% reduction in its net worth as of December 2024, attributed to accounting lapses in currency derivatives dating back over six years. The discrepancies, initially estimated at $175 million, have now been quantified at ₹19.79 billion ($230.92 million) as of June 30, 2024. The RBI has reportedly advised CEO Sumant Kathpalia and Deputy CEO Arun Khurana to step down once suitable replacements are found.
Santosh Kumar, a seasoned finance professional, will oversee the finance and accounts departments until a full-time CFO is appointed. His elevation is seen as a strategic move to restore investor confidence and strengthen the bank's financial governance. Kumar's appointment follows the resignation of Gobind Singh in January 2025, who served as the bank’s CFO for over three years. Post Singh's resignation, Arun Khurana, Deputy CEO and Whole-Time Director, had taken on the additional responsibilities of CFO, which he has now been relieved from.
The bank's shares have experienced significant volatility, dropping by 12% since the disclosure of the accounting impact on March 10, 2025. However, following the announcement of the reduced impact on net worth, shares surged by up to 4.2%, making IndusInd the top performer on India’s Nifty 50 index on that day. Despite these fluctuations, the bank expects to report a profit for the fourth quarter and the fiscal year 2025.
In response to the crisis, IndusInd Bank has initiated a forensic audit conducted by Grant Thornton, with results pending. The bank also plans to reflect the financial impact in its 2024-25 statements and strengthen internal controls over derivative accounting. The ongoing situation underscores the importance of robust financial oversight and the need for transparent communication with stakeholders.
As the bank navigates through these challenges, the appointment of Santosh Kumar as Deputy CFO is a step towards reinforcing its commitment to financial integrity and operational resilience. The banking sector and investors alike will be closely monitoring the developments at IndusInd Bank in the coming months.