Athira Sethu
Kochi, 13 March 2025
In 2023 and 2024, IndusInd Bank’s two senior-most officials, CEO Sumant Kathpalia and Deputy CEO Arun Khurana, undertook substantial transactions of the sale and purchase of shares of the bank. As per insider trading information provided by the Bombay Stock Exchange (BSE), Kathpalia sold nearly 950,000 shares worth Rs134 crore between May 24, 2023, and June 25, 2024. In addition to this, he also purchased 396,000 shares worth Rs34 crore. Likewise, Khurana also sold 550,000 shares for Rs82 crore within the same period and purchased 238,000 shares worth Rs25 crore.
All these deals were under the employee stock option plan (ESOP), whereby employees of the bank, including its senior-most officials, could purchase and sell shares as part of their salary package. But the bank never answered the questions posed by the Economic Times (ET) in connection with these deals.
Meanwhile, IndusInd Bank also revealed more serious issues involving the bank which emerged in the recent past. The bank had revealed that it had found gaps in its portfolio of derivatives which could have a Rs1,600 crore difference in its books. This unanticipated revelation would raise questions on the financial wellbeing of the bank and may leave it with significant losses. The bank clarified that the full effect of these variances would be reflected in the financial report of the March quarter.
The differences were realized between the months of September and October 2024. Kathpalia, recently approved for a one-year extension as CEO by the Reserve Bank of India (RBI), mentioned the issue in an analyst call on Monday. The extension is at a time when the bank is juggling both the financial discrepancies and the high-ranking executive share trades.
Although such problems have ensued, the management of the bank is still seeking ways to keep the situation in hand and tell investors and other stakeholders what’s going on. Such incidents question the stability of the bank, particularly when chief executives engage in huge share purchases at a time of possible fiscal uncertainty.
IndusInd Bank’s next moves will be scrutinized by investors, as they wait for further information regarding how the bank intends to deal with these discrepancies and regain confidence.
