Karnataka Bank’s CEO Srikrishnan Hari Hara Sarma has stepped down from his role, according to multiple media reports. Sarma tendered his resignation on Friday, following internal disagreements with the bank’s board over a financial matter, Moneycontrol reported. Executive Director Sekhar Rao is also expected to resign by July 30.
According to reports, the differences come from a Rs 1.53 crore expenditure incurred in May for consultancy and related purposes, an amount reportedly beyond the delegated powers of the bank’s whole-time directors and not ratified by the board. This issue was flagged by the bank’s statutory auditors, who noted that the amount may be recoverable from the directors concerned.
Recently, during the bank’s earnings call, an investor questioned the board about the auditors’ findings. In response, Sarma acknowledged the situation but downplayed its significance.
“It’s a very simple matter. The amounts are very insignificant, but it’s just the governance part,” Sarma said. “If there is anything incurred beyond delegated authority, there are explanations, and we ensure those are either ratified or addressed,” The Hindu Businessline reported him as saying.
He added that while the bank has a policy in place, some ambiguity in its interpretation led to the lapse. “There was some kind of interpretational or policy ambiguity, which has been corrected already. We will ensure it doesn’t happen again,” Sarma had said.
Karnataka Bank’s Q4 earnings
In May, Karnataka Bank reported a marginal dip in its net profit for FY 2024–25, with earnings slipping to Rs 1,272.37 crore from Rs 1,306.28 crore in the previous year. For the fourth quarter of the fiscal, net profit declined to Rs 252.37 crore, compared to Rs 274.24 crore in Q4 of FY24.
The bank’s total deposits rose to Rs 1,04,807.49 crore, marking a year-on-year growth of 6.96%, while gross advances increased by 6.79% to Rs 77,958.72 crore. Retail lending remained a key growth driver, registering a 15.44% rise, while the share of retail deposits climbed to 93.4%.
CASA (Current Account Savings Account) deposits also saw an improvement, growing 6.35% year-on-year from Rs 31,293 crore in March 2024 to Rs 33,281 crore in March 2025.