IndusInd Bank has initiated action to recover bonuses and possibly other compensation from its former senior leadership, including ex-CEO Sumant Kathpalia, former Deputy Managing Director Arun Khurana, and ex-CFO Gobind Jain. The bank plans to issue show-cause notices to these former executives as part of its effort to claw back previously awarded bonuses amid concerns over past practices.
According to earlier reports, the bank’s internal review identified potential accounting misstatements and compliance failures, particularly linked to accounting irregularities in its derivatives portfolio, which resulted in significant losses. This review prompted the board to seek legal opinions on enforcing clawback provisions for variable pay under both its internal code of conduct and Reserve Bank of India (RBI) guidelines on executive compensation.
The clawback move reflects heightened focus on corporate governance and accountability in the aftermath of these financial reporting issues. The irregularities previously led to the exit of top executives and sparked investigations by regulatory authorities, including actions by the Securities and Exchange Board of India (SEBI) related to insider trading allegations against some former executives.
IndusInd Bank’s effort to recover bonuses from former officials underscores a broader shift toward stricter oversight and consequences for compliance lapses in India’s banking sector.
