The Reserve Bank of India (RBI) has approved IndusInd Bank’s request to form an executive committee to discharge the duties and responsibilities of the chief executive officer (CEO) for a period of maximum three months or till a new CEO takes charge, whichever is earlier.
Photograph: Anushree Fadnavis/Reuters
The executive committee will oversee the operations of the Bank, under the oversight and guidance of the Oversight Committee of the Board.
The oversight panel, which is chaired by the chairman of the bank Sunil Mehta, has chairs of the Audit Committee, the Compensation and Nomination & Remuneration Committee, and the Risk Management Committee as members, the private sector lender informed the exchanges on Wednesday.
“Based on the RBI approval, the Board has constituted such ‘Committee of Executives’ to oversee the operations of the bank, under the oversight and guidance of the Oversight Committee of the Board till a new MD & CEO of the bank assumes charge or a period of three months from the date of relieving the incumbent MD & CEO, whichever is earlier,” the lender said.
The development follows resignation of MD&CEO Sumant Kathpalia on Tuesday, citing “moral responsibility” for “various acts of commission/omission” following accounting lapses that resulted in a loss of nearly ₹2,000 crore to the bank.
Sources indicated that the RBI has directed the Bank’s Board to send the CEO names for its approval as soon as possible.
Following the central bank’s approval, the Bank’s Board has constituted the “Committee of Executives”, which comprises Soumitra Sen, head-Consumer Banking, and Anil Rao, chief administrative officer.
“The Bank is taking all necessary steps to ensure stability and continuity of its operations while maintaining high standards of governance,” the private lender said in an exchange notification.
On Monday, a day before Kathpalia’s resignation, Deputy CEO Arun Khurana also resigned in connection with the same accounting lapses.
Khurana was given the additional responsibility of the CFO after Gobind Jain resigned in January.
Following the resignations of the CEO and the deputy CEO, IndusInd’s Board is without a whole-time director. RBI norms require at least two whole-time directors on the Board of private sector banks.
Sen, who is part of the “Committee of Executives”, joined IndusInd Bank in 2008 to revamp and scale up its distribution network.
He had started MNC food giant Nestle before moving on as a retail banker. He has worked with Bank of America and thereafter had stints with Deutsche Bank AG, ABN AMRO Bank NV, and Royal Bank of Scotland (RBS), before moving to IndusInd Bank.
Rao has over three decades in the banking industry, working with Bank of America, followed by stints at ABN AMRO Bank, and RBS.
