In a significant development, IndusInd Bank’s Deputy CEO and Whole-time Director Arun Khurana resigned with immediate effect, taking responsibility for accounting lapses that resulted in a nearly Rs 2,000 crore adverse impact on the bank’s profit and loss statement. Khurana, who oversaw the treasury front office function, stepped down following an independent investigation that uncovered incorrect accounting practices related to internal derivative trades.
The probe, commissioned by the bank’s board in March 2025 and conducted by an external professional firm, confirmed a cumulative adverse accounting impact of Rs 1,959.98 crore as of March 31, 2025. The discrepancies arose mainly from the incorrect accounting of internal derivative trades, especially during early terminations, which led to the premature recognition of notional profits and distorted the bank’s financial results.
In his resignation letter submitted on April 28, Khurana stated, “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 the senior management of the bank, hereby resign, effective immediately.” He also offered his assistance to ensure a smooth transition of responsibilities. This resignation comes a day after IndusInd Bank informed stock exchanges that it would hold staff accountable for the losses and realign senior management roles to strengthen internal controls and accountability. The bank has already discontinued all internal derivative trading activities from April 1, 2024, and plans to reflect the financial impact in its FY 2024-25 financial statements.
Despite the setback, IndusInd Bank’s shares gained around 3% in early trading on April 29, reflecting investor confidence in the bank’s efforts to address the issue transparently and decisively.
This episode marks the second high-profile exit from the bank in 2025, following the resignation of CFO Govind Jain in January. The Reserve Bank of India had recently approved a one-year extension for the bank’s MD and CEO Sumant Kathpalia, signaling continuity in leadership amid the crisis.This article is based on the latest disclosures and reports on IndusInd Bank’s accounting lapses and Arun Khurana’s resignation as of April 29, 2025.