Karnataka Bank, based in Mangalore, announced late on 29 June (Sunday) that two of its top leaders, likely to step down soon due to disagreements with the bank’s board. Managing Director and CEO Srikrishnan Hari Hara Sarma and Executive Director Sekhar Rao both have resigned. The bank’s board has agreed to their decision and accepted their resignations.
However, both of the bank’s top leaders said they are resigning for personal reasons. Srikrishnan Hari Hara Sarma mentioned in his resignation that he is stepping down mainly for personal reasons and plans to move to Mumbai. His last working day will be July 15. Sekhar Rao also mentioned personal reasons, including being unable to move to Mangaluru which is where the bank’s head office is. His last day at work will be July 31.
In May, the bank’s auditors pointed out that the bank spent ₹1.53 crore on hiring a consultant and other things. According to the auditors, these payments were not approved by the board and were beyond the allowed powers of the CEO and executive directors. They also said that the money should be recovered from the directors who approved it.
As per some reports there were disagreements between Srikrishnan Hari Hara Sarma, Sekhar Rao, and the bank’s board. especially about how some money was spent. This may have been one of the reasons they decided to resign. In May, the bank’s auditors pointed out that the bank spent ₹1.53 crore on hiring a consultant and other things. The auditors said this money was spent without the board’s approval and it was more than what the CEO and executive directors are allowed to approve on their own. They also said that the money should be recovered from the directors who approved it.
This issue caught the attention of the RBI but the bank has explained that any issues with their yearly financial reports were talked about and peacefully resolved.
This isn’t the first time Karnataka Bank’s leadership has had issues with its board. In the past, a former CEO also left early due to similar disagreements. the bank has set up a search committee to find new leaders for both positions. Until then, an experienced senior banker has been appointed as the Chief Operating Officer (COO) and will start on July 2.
Karnataka Bank assured customers and stakeholders that it remains financially strong and doing well. It also said that its plans to improve and grow will keep moving forward without any problems or delays.
