IndusInd Bank has started the process of clawing back salary and bonuses from its former CEO, Sumant Kathpalia, and deputy CEO, Arun Khurana, sources told Reuters.
According to the information shared on the news platform, the process was initiated after an internal review flagged misconduct and misreporting. As such, IndusInd decided to utilise the Indian banking regulations that have been in place since 2019 and incorporate clawback provisions into employee contracts.
This year, IndusInd Bank had disclosed incorrect accounting on its derivative trades. This had led to a $230 million hit to its accounts and the exit of then CEO Sumant Kathpalia and deputy CEO Arun Khurana in May 2025. Both officials are now being investigated by the Indian markets regulator and enforcement authorities over accusations of insider trading and accounting irregularities.
“The board of IndusInd Bank has obtained legal opinion on fixing staff accountability on the basis of its own internal code of conduct and as per Reserve Bank of India (RBI) guidelines,” another source told Reuters, adding that the bank board viewed the case as one of “accounting misstatements, regulatory sanction, failure of internal controls and failing to ensure compliance, leading to breach of rules, regulations and damage to the bank”.
As per IndusInd’s publicly available code of conduct, such acts are regarded as constituting “misconduct, necessitating disciplinary action.” The clawback could cover the period between December 2023 and March 2025, the source added.
In IndusInd’s annual report for the fiscal year ending in March 2025, Kathpalia’s total fixed pay was marked as ₹75 million, and he exercised 248,000 stock options. Similarly, Khurana’s total fixed pay was ₹50 million.
Kathpalia and Khurana are also facing regulatory action by the Securities and Exchange Board of India (SEBI). They have been barred from securities markets since May, pending the completion of the investigation into accusations of insider trading.
IndusInd’s new CEO, Rajiv Anand, had told Reuters earlier in November 2025 that the bank was conducting an internal accountability exercise. He also discussed conducting a comprehensive organisational overhaul before the start of the next financial year.
