IndusInd Bank Deputy CEO Arun Khurana Steps Down

Wishing Mr. Arun Khurana new horizons, meaningful opportunities, and great success in their future endeavors!

In a move that sent ripples through the financial corridors, Arun Khurana, Deputy CEO and Whole-time Director at IndusInd Bank, has officially stepped down with immediate effect. His resignation follows the outcome of a forensic probe that unveiled grave discrepancies in the accounting of internal derivative trades under his purview.

Khurana, a key figure in the bank’s senior leadership and entrusted with the oversight of the Treasury Front Office, addressed the Board in a letter where he acknowledged the weight of the situation.

“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 Senior Management of the bank, hereby resign, effective immediately,” he wrote.

The saga began unfolding on March 10, 2025, when IndusInd Bank disclosed a possible dent in its net worth due to mark-to-market (MTM) losses stemming from its derivatives portfolio, a hit that could account for as much as 2.35% of its net assets, close to ₹1,600 crore. That single revelation caused a market tremor, dragging the bank’s share price down by nearly 25%, from ₹900 to ₹686.

To ensure accuracy and transparency, the IndusInd bank initiated an external probe. Initially, a professional firm was tasked with reviewing the accounting issues. Their final report, submitted on April 26, 2025, confirmed a staggering cumulative impact of ₹1,959.98 crore on the bank’s profit and loss account as of March 31, 2025. The primary cause? Faulty accounting practices tied to internal derivative trades, especially in early terminations, leading to inflated notional gains and distorted financial records.

For context, the initial discrepancies were flagged during a review in October 2024. The bank then enlisted an audit firm to begin quantifying potential losses. Later, at the behest of the Reserve Bank of India, a more in-depth forensic audit was conducted by a global firm to ensure conservative, detailed scrutiny.

As a corrective measure, IndusInd Bank had already ceased all internal derivative trades from April 1, 2024. The IndusInd bank has also committed to re-aligning leadership roles and reinforcing accountability within its senior management ranks.

The fallout may have bruised the IndusInd  bank’s financial image, but it also marked a necessary reckoning. In the ever-evolving theatre of finance, clarity must be the compass, and when shadows appear, change must follow.

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