IndusInd Bank moves to claw back bonuses from ex-top brass

Sumant Kathpalia, former deputy managing director Arun Khurana and former chief financial officer Gobind Jain, as part of its move to claw back bonuses previously paid to them, two people familiar with the matter said.

The bank has not yet finalised the clawback period, which is likely to span two to three years. The proposed action is based on findings from multiple internal and external reports commissioned by the bank, including reviews conducted by Grant Thornton, PwC and EY, they said.

The three executives were at the helm of RBI‘s November 2019 guidelines on compensation of key managerial personnel require banks to institute a clawback mechanism for variable pay to mitigate misconduct risk and ensure compliance with statutory and regulatory requirements.

Kathpalia received variable pay of ?6 crore for FY23, comprising 30% cash and 70% non-cash (share-linked instruments). Of the cash component, 50% was paid upfront, with the remaining 50% deferred over a three-year vesting period. The entire non-cash component also carried a three-year vesting period.

It could not be ascertained whether the bank obtained RBI approval for variable pay in subsequent years. In FY24, Kathpalia earned a fixed salary of Rs 7.5 crore, while Khurana earned Rs 5 crore.

In FY25, Kathpalia exercised 2,48,000 stock options, while Khurana exercised 5,000 stock options, according to the bank’s disclosures.

Information on the bonus paid to Khurana and Jain is not available.

Separately, the Securities and Exchange Board of India is investigating allegations of insider trading and misuse of unpublished price-sensitive information against Kathpalia and Khurana. In an ex-parte interim order dated May 28, the regulator barred both individuals from trading in the securities market and directed them to disgorge alleged illegal gains.