Social ,18 Apr 2025

IndusInd Bank Appoints Santosh Kumar as Deputy CFO Amid RBI Scrutiny

IndusInd Bank, one of India’s leading private sector lenders, has appointed Santosh Kumar as its new Deputy Chief Financial Officer (CFO). The appointment comes at a pivotal moment as the bank faces increased scrutiny from the Reserve Bank of India (RBI) over a long-standing accounting lapse in its currency derivative book.

 

Background: Accounting Irregularity Spurs Leadership Reshuffle

In March 2025, IndusInd Bank disclosed that it had identified an accounting discrepancy in its currency derivatives business—an error that dated back over six years. The issue, while not suggesting fraud, involved misreporting of mark-to-market (MTM) gains and losses, which had a cumulative impact on the bank’s financial statements.

The disclosure shook investor confidence and led to a 12% decline in the bank’s stock value within days. Following this, the RBI stepped in to review the internal controls and governance practices of the bank, particularly within its treasury and finance divisions.

 

RBI’s Intervention and Leadership Changes

In response to the incident, the RBI advised the bank’s current Managing Director and CEO, Sumant Kathpalia, to step down once a suitable successor is identified and approved. The central bank also recommended a change in the finance leadership, particularly after the departure of Arun Khurana, the then-Chief Financial Officer who was overseeing treasury operations during the years of the accounting mismatch.

The induction of Santosh Kumar as Deputy CFO is seen as the first major step in rebuilding credibility and strengthening internal governance.

 

Who is Santosh Kumar?

Santosh Kumar brings with him over two decades of experience in banking and financial management, having served in senior finance roles across private sector banks and global financial institutions. Known for his strong grip on regulatory compliance, internal audits, and financial risk management, Kumar is being tasked with overseeing a complete audit of internal financial systems, enhancing transparency, and ensuring alignment with IFRS and Indian GAAP standards.

While the bank has not disclosed whether Kumar will eventually assume the CFO position, industry insiders suggest that his appointment paves the way for a more compliance-oriented financial leadership team.

 

Implications for IndusInd Bank

The accounting lapse has raised concerns about corporate governance practices in Indian private sector banks, reigniting conversations around:

1. Board oversight of treasury operations
2. Adequacy of internal audit mechanisms
3. Accountability of senior management

The bank’s move to proactively reshuffle its leadership and cooperate with RBI’s directives is seen as a damage control effort to reassure investors, depositors, and regulators alike.

Financial analysts have noted that while this may temporarily impact investor sentiment, it also offers IndusInd an opportunity to revamp its processes, restore credibility, and enhance governance in the long term.

 

What’s Next?

IndusInd Bank is expected to:

1. Conduct an independent forensic audit
2. Strengthen its risk and compliance teams
3. Align more closely with RBI’s expectations
4. Possibly announce further leadership restructuring, including a new CFO and CEO

The RBI’s heightened supervision could also act as a precedent for similar regulatory actions across the sector, especially in areas dealing with complex financial instruments like derivatives.

 

Conclusion

The appointment of Santosh Kumar as Deputy CFO marks a turning point for IndusInd Bank, one that will be closely watched by industry peers, regulators, and shareholders. With RBI tightening its oversight on financial reporting standards, this incident underscores the growing need for robust internal checks, transparency, and board-level vigilance in the rapidly evolving Indian banking landscape.