Arun Khurana steps down as IndusInd Bank deputy CEO with immediate effect

A bank-appointed external auditor has determined cumulative adverse accounting impact on P&L at Rs 1,959.98 crore as on March 31, which is similar to the amount disclosed on April 15, IndusInd Bank said in a regulatory filing.

IndusInd Bank said on Monday that its deputy CEO, Arun Khurana has resigned with immediate effect, weeks after the private lender disclosed accounting lapses in its derivatives portfolio. Arun Khurana headed the global markets division of the bank, which included the derivatives portfolio

Arun Khurana, in his resignation letter, wrote, "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."

Arun Khurana further wrote that he will help in transitioning his responsibilities to ensure a smooth handover. IndusInd Bank on Sunday said accounting lapses in the derivative portfolio will cost the bank Rs 1,960 crore in FY25.

A bank-appointed external auditor has determined a cumulative adverse accounting impact on P&L at Rs 1,959.98 crore as on March 31, which is similar to the amount disclosed on April 15, IndusInd Bank said in a regulatory filing.

The bank has already discontinued internal derivative trades from April 1, 2024, it said. "The report identifies incorrect accounting of internal derivative trades, especially in case of early termination, which resulted in recording of notional profits, as the principal root cause for accounting discrepancy," the bank said. The report also examined the roles and actions of key employees in this context, it said.

The board is taking necessary steps to fix accountability of the persons responsible for these lapses and realign roles and responsibilities of senior management, it added.

On April 15, IndusInd Bank disclosed the basis report of another external agency that accounting lapses in the derivative portfolio will have a negative impact of Rs 1,979 crore on its net worth. The bank has assessed an adverse impact (on a post-tax basis) of 2.27 per cent to its net worth as of December 2024 on account of discrepancies relating to derivative deals.

The private sector lender reported last month the accounting lapses in the derivative portfolio estimated to have an adverse impact of approximately 2.35 per cent of the bank's net worth as of December 2024.

*With Agency Inputs