MUMBAI: Following the Reserve Bank’s late last night nod to the appointment of Rajiv Anand as the chief executive and managing director for a three-year term, the shares of the accounting scam-hit Indusind Bank jumped over 5% in early trade on Tuesday to Rs 489. But as the wider risk–off sentiment hit the market, the counter pared most of the initial gains but still trading in the green.
The 59-year-old Anand quit the rival Axis Bank as its deputy managing director on August 3 before his appointment. He was anyways to retire from Axis Bank later this month. The three-year appointment will run until August 24, 2028, pending shareholder approval at the bank's upcoming general meeting, the bank said in a late night exchange filing.
Earlier, during the June quarter investor call, Indusind chairman Sunil Mehta had said the bank was working to strengthen its senior management bench by identifying top-quality leadership talent, both internally and externally.
Anand has over 35 years of experience in the financial services sector. He began his journey at Axis Asset Management Company in 2009 as its founding managing director and chief executive. In 2013, he moved to Axis Bank as president of retail banking, eventually joining the board in the same year. In 2018, he was appointed to lead the wholesale banking and since December 2021 he has been serving as deputy managing director, overseeing several critical functions including wholesale banking, digital banking, marketing, and corporate communications. Anand was set to retire from the bank in August.
In a note on his appointment, domestic brokerage Emkay Global said Tuesday morning, "we believe Anand brings on board an extensive experience across wholesale/retail banking, digital transformation, and capital markets, having worked across global financial institutions including StanChart, ANZ Grindlays, HSBC, and lastly at Axis Bank across various functions."
However, Emkay noted “we view the appointment of a seasoned private banker, versus rumors about the risk of hiring a PSB banker, as a positive development for the bank in the long run."Yet, the brokerage believes that Anand will have the tough task of rebuilding a leadership team, reorienting the bank’s asset/liability mix, reinforcing governance standards, and restoring stakeholders’ confidence, before setting off a turnaround for the bank once again. "We believe clarity on the long-term strategic direction may take some more time.
In the interim, the stock performance is likely to be driven by near-term outcome on margin and asset quality, with the risk of kitchen sinking remaining a niggling concern," Emkay noted and reaffirmed its 'reduce' call, with a price target of Rs 700.The troubled Indusind has been headless since late April when the scam-tainted chief executive Sumant Kathpalia and his deputy Arun Khurana resigned owning moral responsibility for the massive losses in its forex derivatives trading book.
As RBI mandated, the board of the bank had shortlisted three names--Rajiv Anand, Anup Saha of Bajaj Finance, and Rahul Shukla of HDFC Bank--to man the top deck of the bank and had submitted to the regulator for approval. While Saha is the managing director of Bajaj Finance, Shukla is the group head of commercial and rural banking at HDFC Bank and is on a sabbatical from the largest private sector bank.
While Kathpalia had resigned on April 29, Khurana did so a day before. Both had cited moral responsibility for the scam for the decisions to leave, which came in well after seven weeks since the crisis came out. Both have also been banned by the market regulator from the market for insider trading—they had pocketed over Rs 157 crore from selling bank’s shares in 2023-24.
Since their resignations, the bank has been run by an RBI-approved executive committee comprising its consumer banking head Soumitra Sen and chief administrative officer Anil Rao. The new leadership is crucial development for the bank, which has been in focus since early March when it was forced by the RBI to inform all stakeholders that it made accounting mistakes in the forex derivatives books for several years and that it would have to make provisions to the tune of 1.35% of its networth as of December 2024 when it was Rs 64,000 crore.
On May 22 the bank said while announcing the March quarter earnings that the losses were much higher at Rs 2,329 crore. It had booked a net profit of Rs 2,349 crore in the year-ago period. Most of the loss was due to the impairment in its forex derivatives book, which the management first said would be only around Rs 1,600 crore.
The lender reported net interest income of just Rs 3,048 crore in Q4 a whopping 43% less from Rs 5,376 crore a year ago. Since the accounting scam, the bank counter lost more than half its value from its 52-week high of Rs 1,514.95 recorded in June 2024.
Following the accounting scam announcement on March 10, the scrip had plunged to a low of Rs 605.40 on March 11, losing as much as 27% on a single day. Indusind came under intense regulatory scrutiny following a series of financial and regulatory setbacks on March 10, 2025 when it was forced to admit a massive accounting lapse amounting to Rs 1,979 crore in its forex derivatives portfolio.
This was followed by findings from an internal audit that uncovered Rs 674 crore erroneously recorded as interest income from its microfinance segment. Additionally, the review flagged Rs 595 crore under unsubstantiated balances classified under other assets on the balance sheet, raising concerns over its corporate governance practices and financial reporting standards.
These revelations were accompanied by regulatory action from the Securities and Exchange Board, which barred Kathpalia, Khurana and two other senior executives from accessing the securities market over alleged insider trading involving the bank’s shares.