IndusInd Bank likely to tap Korn Ferry, Egon Zehnder to shortlist candidates for top jobs

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A formal search process to fill top managerial positions ---also referred as material risk takers (MRT) in banking parlance ---at IndusInd Bank is set to begin by early April. Two large global recruitment firms – Egon Zehnder and Korn Ferry are likely to be roped in to identify candidates for  key positions.

The assignment for the recruiters includes finding a replacement for Sumant Kathpalia, the bank’s current MD & CEO, Arun Khurana, deputy MD and executive director who has also been given the additional charge of chief finance officer (CFO) as well as a CFO to replace Gobind Jain, who resigned on January 17. In addition, new chief compliance officer (CCO) and chief operations officer (COO) may also be appointed.

Two other roles, head – corporate commercial and rural banking helmed by Sanjeev Anand and head – consumer banking and marketing, a position currently held by Soumitra Sen, both of whom are expected to superannuate later this year, would also need to be filled. The mandate for these positions is also expected to be given to head hunters in the coming weeks.

Division of labour

According to sources familiar with the matter, while Egon Zehnder is likely to be responsible for identifying CEO and deputy CEO candidates, the mandate to find two executive directors and the business heads for commercial banking and consumer banking may be given to Korn Ferry. “The bank’s board and its nomination and remuneration policy committee (NRC) will meet later this week to formally kick start the recruitment process,” said a person aware of the matter.

Email sent to the bank seeking comment remained unanswered till the time of publishing the article.

On March 7, the Reserve Bank of India extended Kathpalia’s term as MD & CEO of the bank by only a year, as against the bank board’s recommendation for three years. In a call with investors on March 10, during which the bank revealed serious lapses in derivatives accounting, Kathpalia indicated that the board could look at external candidates for his position when his term ends on March 23, 2026. On the call, he also indicated that the central bank may not have been comfortable with his style of leadership when asked why he was given only a year’s extension as MD & CEO of the bank.

“Given how things are panning out and that there is already very limited availability or scarcity of internal talent for the bank’s board to recommend an internal candidate, an internal replacement for Kathpalia is unlikely,” said a source aware of the matter. Sources in the know say there could also be a major shake-up in the treasury and risk management roles.

That apart, the bank is in the process of overhauling its microfinance operations. Hiring for some positions,  including in the MFI business is already ongoing, according to industry sources. A few domestic headhunters are said to have been roped in for this process.

Once the hiring plan for MRTs is rolled out in the coming weeks, the sources cited say that by September or October a CEO candidate to replace Kathpalia is likely to be identified by the board. “This will be taken up as top priority by the board,” said the banker quoted above.