IndusInd Bank CEO Selection On Track, RBI Review Underway: Chairman
In a recent call with analysts, IndusInd Bank Chairman Sunil Mehta confirmed that the leadership transition of the private sector bank is ‘well on track’, despite the challenges posed by the derivative accounting fiasco.
The bank has submitted its recommendations for the new chief executive officer (CEO) to the Reserve Bank of India (RBI) within the stipulated June 30 deadline, and the central bank is currently reviewing the proposals.
‘There is no change in the timelines for the CEO appointment. RBI is in the process of approvals,’ Mehta told analysts in the post-earnings call.
Once appointed, the new CEO will lay out a detailed strategic roadmap and implement the same, Mehta said.
The bank has been without a full-time CEO since April, when MD and CEO Sumanth Kathpalia and Deputy CEO Arun Khuranna announced their immediate resignations, taking moral accountability of the derivative accounting episode.
A committee of two senior executives has been managing the bank in the interim, with a deadline set for July 28 to complete the transition. However, the deadline has been extended to August 28, giving the RBI more time to review the proposals.
Mehta also shed light on the bank’s future plans, including improving profitability, tighter cost control, sharper recovery efforts, strengthening the ‘One IndusInd’ brand identity, and deeper stakeholder engagement.
The bank’s board, along with the management, has aligned on five key focus areas, which will guide the bank’s strategy moving forward.
In terms of senior management hiring, Mehta said that some senior management members of the bank were also superannuating, and the bank was looking at internal and external candidates to fill any gaps.
‘As we move towards building the new leadership team and once we have the new MD and CEO in place, we will also look at bringing in two whole-time directors in due course,’ he said.
The clarity on succession comes at a crucial time for IndusInd Bank, as it looks to turn the page after the regulatory scrutiny on derivatives accounting related disclosures earlier this year.
In April, the bank reported a standalone net profit of Rs 684 crore in the June quarter, as against a loss of Rs 2,236 crore in the preceding quarter.
Mehta said that the bank has reported stable profitability metrics and believes that the financial return metrics are still below potential and admits there is scope for significant improvement from here on.
‘The bank is actively working towards near-term opportunities, and compliance and governance culture remains the lender’s primary area of focus,’ he said.