The interim order also impounds their bank accounts to the extent of gains allegedly made from trades based on unpublished price-sensitive information (UPSI). SEBI’s findings reveal that key executives were aware of significant discrepancies in the bank’s derivative portfolio by November 2023 but delayed public disclosure until March 2025.
Internal email correspondence detailed in the SEBI order shows that the issue was first flagged on November 20, 2023, when the CFO wrote to former Deputy CEO Arun Khurana, Head of Treasury Operations Sushant Sourav, Senior VP of Global Markets Rohan Jathanna, and others: “
Yet to see the impact analysis of derivative accounting. Every six months we get big impact in proforma IndAS reporting.”
By November 30, the Head of Accounts had quantified the impact at ₹1,749.98 crore. Former CEO Sumant Kathpalia was looped in on December 4 and acknowledged: “We need to do the reporting. There seems to be a huge impact…” On December 16, the CFO wrote: “The derivative numbers have been confirmed with TBO. We propose to submit the same to the RBI on Monday.” Kathpalia responded that the issue was “very, very serious” and inconsistent with previous investor communications.
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SEBI noted that while the final figure of ₹1,572 crore was internally confirmed and even proposed for submission to the RBI, it was not disclosed to the public until March 10, 2025 — over 15 months later. Despite external validation from KPMG in February 2024, estimating the impact at₹2,093 crore, no market disclosure was made. SEBI concluded that UPSI clearly originated by December 4, 2023, and should have been classified and disclosed accordingly. The five barred individuals include Kathpalia, Khurana, Sourav, Jathanna, and Chief Administrative Officer Anil Marco Rao. The regulator’s investigation into potential disclosure violations and additional suspects remains ongoing.
Here’s the timeline of events- compiled by CNBC-TV18 from SEBI’s May 28 interim order- leading upto the fateful March 10, 2025 disclosure by IndusInd Bank that culminated into its CEO and Deputy CEO exiting the bank, and the bank reporting its first ever loss in nearly two decades for the quarter ending March 2025.
Timeline of Events:
Nov 20, 2023: CFO email to Arun Khurana, Sushant Sourav, Rohan Jathanna & others
“Yet to see the impact analysis of derivative accounting. Every six months we get a big impact in proforma IndAS reporting.”
Nov 21, 2023: CFO email in same trail “We already have done exercise in the past with KPMG while preparing for submission of the proforma IndAS financial statement to the Bank. There is already an information being prepared on a six-monthly basis for the impact of IndAS on derivative accounting.”SEBI Conclusion: By November 21, 2023, the CFO had ascertained there will be some impact on the Balance Sheet owing to discrepancies
Nov 29, 2023: Head of Balance Sheet Liquidity Management email to Khurana, Sourav, Jathanna & others:
“We need the numbers urgently. Please assist as my team is struggling to find answers here. As mentioned, this needs to be discussed with MD this evening.”
Nov 30, 2023: Head of Accounts email to Sushant Sourav, Anil Rao & others noted ₹1749.98 crore impact due to discrepancy in account balances of derivative portfolio
Dec 4, 2023: Email from Sumant Kathpalia, then CEO to CFO & Arun Khurana: “we need to do the reporting. There seems to be a huge impact…..”
SEBI Conclusion: By Dec 4, 2023, Sumant Kathpalia had been briefed regarding the impact of the discrepancies.
Dec 6-8, 2023: Emails to many employees of IBL, including Sumant Kathpalia and the CFO, showed that a figure of ₹1,362 crore was reported as discrepancies.
Dec 11, 2023: The Final figure of the impact emailed to Arun Khurana by Balance Sheet Liquidity Management – GMG was ₹1,572 crore.
Dec 16, 2023: Final numbers as per the IndAS were disclosed/informed to Khurana & Kathpalia by the CFO: “Enclosed is the final numbers as per IndAS. The derivative numbers have been confirmed with TBO (Treasury Back Office). We propose to submit the same to the RBI on Monday.”
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Dec 16, 2023: Kathpalia email to CFO and Khurana: “This will imply our CET 1* will reduce. How much is the impact in the next financial year.”
Dec 17, 2023: CFO shared the calculation of the projected Capital to Risk Asset Ratio (CRAR) due to the negative impact of discrepancies with Kathpalia.
Dec 17, 2023: Kathpalia email to Khurana and CFO: “This is against what we have been talking to investors. It seems we need to go to the Market early next year. This is very, very serious. Pls have these calculations on derivatives again revalidated.”
SEBI Conclusion: Vide emails dated December 16, 2023, March 06, 2024 and May 05, 2024, figures of discrepancies ₹1,572 crores, ₹1,776.49 crore, and ₹2,361.69 crores for the period ending September 2023, December 2023 and March 2024, respectively, were circulated amongst the employees of IndusInd Bank. However, the same was disclosed to the general public through a disclosure on stock exchanges only on March 10, 2025.
SEBI Conclusion: As can be seen from the above emails of Kathpalia dated December 04, 2023 and December 17, 2023, the issue of discrepancies was serious, and the UPSI pertaining to the discrepancies had effectively originated on or before December 04, 2023. It is prima facie inferred that the materiality of the information was never in question among members of the senior management of IBL, and given the seriousness of the issue realized/highlighted CO Kathpalia himself, the information should have been classified as UPSI from December 04, 2023, itself.
Dec 16, 2023: Khurana email proposed to get external validation w.r.t. the discrepancies: “I propose we get external validation”
Jan 17, 2024: CFO email: “We are engaging a consultant who will study the existing accounting of derivatives and the proposed accounting under the circular.”
Feb 21, 2024: KMPG had given a figure of ₹₹2,093 crore as negative impact due to discrepancies till the December 2023 quarter ending.
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SEBI Conclusion: It is prima facie seen that members of the senior management of IBL insisted on getting the figures validated externally. The preliminary examination revealed that external auditor KPMG had given a figure of ₹2,093 crore to IBL, suggesting the negative impact due to discrepancies, till December 31, 2023, vide email dated February 21, 2024.
SEBI Conclusion: The bank had initiated the exercise of getting the internal figures related to the discrepancies, validated from an outside expert/consultant, i.e. KPMG, sometime by January-February 2024. However, these figures were neither reported through the Exchange platform till March 10, 2025, nor were being classified as UPSI by IBL till March 04, 2025.
March 10, 2025: Bank discloses derivatives discrepancy at 2.35% of December 2024 net worth (est at ₹1,529.88 crore)
March 10, 2025: Bank exchange disclosure on appointing an external agency to independently review and validate the internal findings.
SEBI Conclusion: UPSI was already in existence on or before December 04, 2023, and discrepancies were being proposed to be submitted to RBI regularly, but UPSI was published/disclosed to the Exchanges only on March 10, 2025, i.e. after a delay of approximately 15 months from the date when the members of the senior management of IBL first came in the knowhow of events surrounding the discrepancies and the huge impact it was bound to have on financial accounts/balance sheet of IBL.