In a major corporate development, IndusInd Bank on Monday announced that Arun Khurana, the Whole-time Director (Executive Director) and Deputy CEO, has resigned from his position with immediate effect. The move follows the bank’s internal acknowledgment of serious accounting lapses in its derivatives book, which have resulted in a cumulative adverse financial impact of nearly ₹1,960 crore as of March 31, 2025.
Khurana, who oversaw the Treasury Front Office function, cited these lapses and the recent forensic revelations as the reasons behind his abrupt exit. In a resignation letter addressed to the Board of Directors, Khurana wrote, “Considering the recent unfortunate developments… I hereby resign, effective immediately.”
Forensic Probe Reveals ₹1,960 Cr Hit to Profit and Loss Account
The financial discrepancies came to light after the bank’s board appointed a professional advisory firm on March 20, 2025, to conduct a detailed investigation. The firm’s report, submitted on April 26, confirmed that improper accounting of internal derivative trades—especially related to early terminations—had led to notional profit bookings and artificially inflated financial statements.
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According to the report, the accounting error resulted in an adverse cumulative impact of ₹1,959.98 crore on the bank’s profit and loss account. These trades, conducted internally, were supposed to be revenue-neutral but were misrepresented in accounting practices, distorting the bank’s true financial performance.
Fallout: Market Reaction and Regulatory Oversight
The issue was initially flagged on March 10, 2025, when IndusInd Bank disclosed that mark-to-market (MTM) losses in its derivatives portfolio could reduce its net worth by as much as 2.35% — translating to nearly ₹1,600 crore. Following the disclosure, the bank’s share price plummeted nearly 25%, dropping from ₹900 to ₹686 apiece, shaking investor confidence.
In response, the Reserve Bank of India (RBI) directed the bank to initiate a full forensic probe. Global audit firm Grant Thornton Bharat (GTB) was subsequently brought in to assess the true extent of the damage. This came after an initial assessment by PwC, which was tasked with quantifying the discrepancies first detected in October 2024.
IndusInd Bank has since ceased all internal derivative trading, effective April 1, 2024, as a risk containment measure. Additionally, the bank announced plans to overhaul its senior management structure and hold those responsible accountable, while reaffirming its commitment to restoring transparency and internal control mechanisms.
The resignation of Deputy CEO Arun Khurana marks a significant turning point for IndusInd Bank amid heightened scrutiny from regulators, shareholders, and the market. As the bank navigates the fallout, it must rebuild trust and reinforce its risk governance structure to avoid recurrence of such systemic lapses.