IndusInd Bank has begun the process of claiming back bonuses from its former CEO, Sumant Kathpalia, and deputy CEO, Arun Khurana, sources told Reuters. The bank is already in the process of clawing back their salaries.
After an internal review flagged misconduct and misreporting, the two senior officials were let go from the company. Building on that, IndusInd has opted to use the Indian banking regulations that have been in place since 2019 and incorporate clawback provisions into employee contracts.
Earlier in 2025, IndusInd Bank had uncovered incorrect accounting on derivative trades that prompted a loss of $230 million. As such, in May 2025, Kathpalia and Khurana were let go by the bank. The two are now being investigated by the Indian markets regulator and enforcement authorities for 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,” a 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.”
The clawback being initiated by IndusInd may cover the period between December 2023 and March 2025, the source added. The bank’s annual report for the fiscal year ending in March 2025 showed Kathpalia’s total fixed pay was ₹75 million Indian rupees, and he exercised 248,000 stock options. Khurana’s total fixed pay was ₹50 million.
