BURIED IN THE DETAILS

IndusInd Bank faces RBI scrutiny as leadership tensions, governance concerns, and potential penalties mount. With stricter regulations in play, its future—and broader banking oversight—hangs in balance

- BY RAGHU MOHAN

INDUSIND BANK HAS been on the Reserve Bank of India’s (RBI’s) radar for a while now. In March 2025, IndusInd Bank revealed that its derivatives portfolio had been overvalued by $175 million (₹1,450 crore) due to non-compliant internal transactions. The announcement triggered a sharp decline in its stock price.

In 2023, Sumanth Kathpalia, the bank’s managing director (MD) and chief executive officer (CEO) got a shorter two-year extension from the RBI. Speculation was rife that Mint Road may not oblige with another extension, especially after the bank’s chief financial officer (CFO) Gobind Jain resigned on January 17. In early March, Mint Road gave him another one-year life-line, despite the board requesting a three-year appointment.

The bank’s board backed its CEO, but the regulator thought otherwise. A limited extension for the CEO, a CFO’s sudden exit, and a watchful regulator, the signals were flashing red.

Now, with questions of governance, compensation, and potential penalties looming, the scrutiny is only deepening.