The transfer comes only a day after the financial institution signaled its intent to take corrective motion in opposition to workers answerable for the lapses and overhaul its senior administration construction to strengthen accountability.
Khurana’s departure marks the primary senior-level exit within the wake of the derivatives episode, which has not solely impacted the financial institution’s backside line but in addition raised severe considerations over inside controls, threat administration, and company governance requirements at one in all India’s outstanding personal sector lenders.
“Contemplating the latest unlucky developments, whereby the Financial institution decided an adversarial accounting influence on P&L, on account of incorrect accounting for inside by-product trades, I having oversight of the Treasury Entrance workplace perform, because the Entire Time Director, Deputy CEO and part of Senior Administration of the financial institution, hereby resign, efficient instantly,” Khurana’s resignation letter shared with the inventory exchanges acknowledged.
He added that he was prepared to help with the transition course of to make sure continuity and stability.
Khurana had been with IndusInd Financial institution since November 2011 and was additionally head of the International Markets Group. With almost three many years of expertise, Khurana beforehand held senior roles at HSBC, ABN AMRO Financial institution, and later the Royal Financial institution of Scotland after ABN’s acquisition.
His resignation underscores the rising strain on the financial institution’s management to just accept duty for a disaster that has shaken investor confidence and attracted regulatory consideration.
“The board is taking needed steps to repair accountability of the individuals answerable for these lapses and re-align roles and duties of senior administration,” the lender’s board had stated on Sunday.
In accordance with the financial institution, the losses stemmed largely from incorrect accounting of inside by-product trades, particularly in circumstances the place contracts had been terminated early. These errors led to inflated notional income, masking the true monetary state of the derivatives portfolio over a number of reporting durations.
To handle the state of affairs, the financial institution introduced on March 21 that it had appointed an impartial agency to conduct a complete audit of its derivatives e-book and set up administration accountability.
The problem first got here to public consideration on March 10, when IndusInd revealed that mark-to-market (MTM) losses in its derivatives portfolio may scale back its web value by as a lot as 2.35%—roughly Rs 1,600 crore—as of December 2024. The disclosure triggered a pointy sell-off, with the financial institution’s inventory tumbling almost 25% from Rs 900 to Rs 686.
