IndusInd shareholders block Hindujas’ board nominee plan, approve Rajiv Anand as CEO

IndusInd Bank 's shareholders have rejected a proposal by its promoter entity, IndusInd International Holdings (IIHL) to amend the bank’s articles of association to induct two of its nominees to the board. The resolution, which required special majority approval, failed to go through at the annual general meeting held on Friday, with 54.04% votes cast against it versus 45.96% in favour of the proposal.

The proposal had earlier received approval from the Reserve Bank of India and the bank’s board. Following the shareholder vote, IIHL President and CEO Moses Harding expressed disappointment in a company statement. Harding pointed to concerns raised by proxy advisors and suggested that these may have been based on “misinterpretation”.

IIHL, which has supported the bank for over three decades and owns 15% stake in the bank, also highlighted its capital commitment, most notably its subscription to 1.57 crore warrants in February 2021 at ₹1,709 a share, at a substantial premium to the-then price of ₹1,046, resulting in a capital infusion of ₹2,683 crore.

Despite the setback on the board proposal, shareholders overwhelmingly approved the appointment of Rajiv Anand as managing director and CEO for a three-year term with the resolution receiving 98.82% votes in favour and only 1.18% against.

Anand’s elevation comes amid an ongoing accounting discrepancy issue that has impacted the bank’s credibility in recent months. The bank had accounted for the discrepancies identified during FY25, in relation to the accounting of derivative trades amounting to ₹1,959.98 crores, accounting of interest and fee income totalling to ₹846.40 crores pertaining to MFI portfolio and manual entries posted in the ‘Other Assets’ and ‘Other Liabilities’ amounting to ₹595.00 crore.

Despite capital adequacy remaining strong, rating agency has flagged several concerns. Profitability continues to be modest with return on assets falling to 0.4% in Q1 FY26. Asset quality, especially in the microfinance portfolio, has deteriorated sharply, with gross NPAs in that segment rising to 16.39% as of June 2025. The bank also saw a drop in its CASA ratio and overall deposits and continues to rely heavily on bulk deposits. Further, the bank’s gross non-performing assets have surged from 1.9% as of March 31, 2024, to 3.64% in Q1 of FY26.

Against such a backdrop, the contrasting outcomes underscore shareholder willingness to support professional management while pushing back against proposals perceived as enhancing promoter control.