IndusInd Bank Ltd., a prominent name in India’s private banking landscape, had been rocked in March–April 2025 by revelations of long-standing misaccounting in its foreign-exchange derivative portfolio. The bank disclosed a massive loss of approximately ₹1,960–₹2,000 crore—about 2.3 % of net worth—as legacy internal trades were unwound and restated, leading to board-level resignations and severe erosion in investor confidence.
Following this, its then-MD & CEO Sumant Kathpalia, along with Deputy CEO Arun Khurana, stepped down “taking moral responsibility.” In the interim, a committee of senior executives managed day-to-day operations, but the lender’s share price lost over 50 % from its 2024 peak, and investor trust had severely diminished.
2. Enter Rajiv Anand: Appointment and Credentials
On August 4–5 2025, IndusInd Bank formally announced Rajiv Anand as its new Managing Director & CEO, for a three-year term commencing August 25, 2025, subject to shareholder endorsement and backed by RBI approval.
Who is Rajiv Anand?
- Over 35 years in financial services, including roles at HSBC, ANZ Grindlays, Standard Chartered, and Axis Bank—where he recently served as Deputy MD, leading wholesale banking, digital transformation, capital markets, and corporate communications.
- Founding MD & CEO of Axis Asset Management (from 2009), President of Retail Banking at Axis Bank, and later heading Wholesale Banking from 2018 until his retirement in August 2025.https://timesofindia.indiatimes.com/
- Known for a calm, delegative leadership style—not overly directive—yet decisive under pressure.
His appointment is widely seen as a move by regulators and the board to install a steady, trustworthy figure capable of steering the bank back toward credibility and stability.
3. Immediate Tasks Ahead
a) Repairing Governance and Risk Frameworks
A top priority will be overhauling internal controls and audit processes to prevent recurrence of accounting missteps. Anand must restore regulatory trust, enhance transparency, and reestablish cooperation with RBI and SEBI.
b) Building Leadership & Talent
Since critical roles such as CFO, treasury head, and internal audit chief remain vacant, Anand is actively rebuilding the leadership team. He has engaged headhunters to fill top management positions to shore up governance and execution capabilities.
c) Rebalancing Financial Health & Asset Quality
- Focus on improving Return on Assets (RoA) and Return on Equity (RoE): Analysts see potential for medium‑term RoA of ~1 % and RoE approaching 15–18 %, though near-term levels remain muted.
- Stabilize Net Interest Margins (NIM) through prudent loan pricing and liability cost management.
- Tackle rising Non‑Performing Assets (NPAs)—particularly in vehicle finance, microfinance (gross NPA
16 % in June 2025), and housing loans, where exposure is nascent but growing (₹5,000 crore book).
d) Cost Discipline and Profitability
The bank aims to cap cost growth in single digits, targeting a leaner cost-to-income ratio (currently above 62 %) and a profit-first operational model as emphasized by Chairman Sunil Mehta.
e) Rebuilding the Brand
Reinstitution of strategic communication is key: Anand is expected to engage stakeholders consistently, refocus on core strengths like gem & jewellery finance, auto finance, and asset-backed lending, while enhancing customer experience through digital initiatives.
4. Market Sentiment: Cautious Optimism
Following news of Anand’s appointment, investors reacted positively:
- IndusInd Bank shares rose up to 5.4 %, trading as the top gainer on Nifty Bank and Nifty Private Bank indices on August 5, 2025.
- Analysts at Jefferies reaffirmed a Buy rating (target ₹920), citing leadership change as a potential catalyst for organizational revival and top‑deck restructuring.
- Citi remained cautious, maintaining a Sell rating (target ₹765), highlighting risks around execution, asset quality, margin stability, and consistent profitability recovery.
5. A Three-Year Mandate for Long-Term Rebuild
Strategic Priorities by 2028
- Executive Team: Build and retain a quality senior leadership inline with good governance.
- Financial Metrics: Target margin expansion, RoA improvement, asset quality upkeep.
- Capital Positioning: The bank has proposed capital raising—₹30,000 crore (₹10,000 cr equity, ₹20,000 cr debt)—to strengthen its capital cushion for future growth and absorb past losses.
- Digital Evolution & Brand Repositioning: Anand’s track record in Axis Bank’s digital growth efforts will be pivotal for improving operational efficiency and customer engagement.
- Stakeholder Trust: A transparent, consistent narrative to regain confidence—crucial with SEBI investigations ongoing and broader regulatory scrutiny.
6. The Road Ahead: Opportunities & Risks
Opportunities
- Credibility Boost: A respected industry veteran at the helm should reassure regulators, investors, and borrowers.
- Restructuring Potential: Anand’s tenure opens scope for strategic reorientation, sector diversification, and internal optimization.
- Digital Growth Leverage: His digital credentials may accelerate tech-enabled service improvements and cost efficiencies.
Risks
- Execution dependency: Success hinges on flawless execution across governance, credit control, cost discipline, and leadership hiring.
- NPA and recovery challenges: Elevated microfinance NPA (16 %) and household stress require careful navigation.
- Regulatory headwinds: Ongoing SEBI investigations into insider trading linked to earlier disclosures remain a reputational overhang.
Key Milestones
| Item | Date |
|---|---|
| Loss Disclosure | March 10, 2025 |
| Kathpalia/Khurana Resign | April 2025 |
| Appointment Announced | August 4–5, 2025 |
| Appointment Starts | August 25, 2025 |
| Term Duration | 3 years (till August 2028) |
