Sumant Kathpalia, CEO and Managing Director of IndusInd Bank, resigned at the end of the workday on April 29, 2025. He worked as a Chief Executive Officer, of IndusInd Bank for a continuous period of five years.
Kathpalia decided to resign from his position due to ongoing issues related to how the bank handled its derivatives portfolio. He owned up to the issues and stepped down as a matter of principle even if he wasn’t directly involved.
The bank’s Board has asked the Reserve Bank of India (RBI) for approval to set up a temporary group of senior officials to take over the CEO’s responsibilities. This committee will be in charge until a new CEO is officially chosen.
The bank is using a rule called Section 10B(9) from the Banking Regulation Act, 1949. This rule lets a bank set up temporary leadership if the CEO resigns, passes away, or can’t do their job for any reason. The temporary setup can continue for up to four months, but only with RBI’s approval.
Legal Expert Kunal Sharma Said that this rule (Section 10B(9)) is not used often because most banks plan ahead for CEO changes. He said that using the rule is allowed and helps keep the bank stable during a leadership gap but the banks should also do the following:
– Set a clear deadline for choosing a new CEO.
– Keep stakeholders informed (be open and honest).
– Make sure good leadership and governance continues during the transition period.
Sumant Kathpalia resigns after Arun Khurana, Deputy Chief Executive Officer of IndusInd Bank, filed his resignation from the bank on Monday.