IndusInd Bank Deputy CEO resigns amid accounting irregularities

IndusInd Bank has announced the immediate resignation of Arun Khurana, whole-time director (executive director) & deputy CEO, effective on April 28, 2025, following the discovery of accounting discrepancies related to internal derivative trades.

In his resignation letter, Khurana stated: "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."

He expressed gratitude to the IndusInd Bank board for their trust during his tenure, and has offered assistance for smooth handover. "I would like to offer my assistance, as deemed appropriate, in transitioning my responsibilities to ensure a smooth handover," said Khurana, as per the exchange filing.

His sudden departure comes as the bank deals with the financial implications of the accounting matter.

In a stunning revelation, on March 10, 2025, IndusInd announced that it had identified discrepancies in the accounting of derivative transactions conducted over the past 5-7 years for hedging its foreign currency borrowings. It admitted to significant discrepancies in its derivative portfolio, resulting in an estimated adverse impact of 2.35% on its net worth. The estimated loss was around ₹1,529.90 crore, based on the bank’s net worth of ₹65,102 crore as of December 2024. The bank had clocked a profit of ₹6,628 crore during the nine months of the current fiscal year.

Ratings agency Moody's Ratings on March 25 said the impact of the derivatives transactions, coupled with the ongoing stress in the retail unsecured loans, will likely hurt the IndusInd Bank’s profitability, capital and funding, potentially leading to a downgrade of the BCA (Baseline Credit Assessment).

Before Khurana, IndusInd CFO Gobind Jain had also exited the bank on January 17, 2024, just before the announcement of the December quarter results. This unexpected resignation further fuelled concerns regarding the bank's internal controls and financial reporting integrity.

The private sector lender's board has, meanwhile, appointed an independent professional firm to conduct a comprehensive investigation to identify the root cause of the discrepancies, assess the correctness and impact of the accounting treatment of the derivative contracts. The investigation aims to identify any lapses and establish accountability.