Karnataka Bank on Sunday announced that its managing director (MD) and CEO, Srikrishnan Hari Hara Sarma, and executive director (ED), Sekhar Rao, have submitted their resignations, citing personal reasons. In a late evening stock exchange filing, the private sector lender said Sarma had cited personal reasons, including his decision to move back to Mumbai.
“The Board of Directors at its meeting held today (June 29, 2025), after due deliberations, accepted the resignation, which will be effective from July 15, 2025, as requested in his resignation letter,” the bank said in the filing.
Executive Director Rao also tendered his resignation on Sunday, citing the difficulty, under present circumstances, to spend sufficient time in Mangaluru or relocate from Bengaluru. His resignation has been accepted by the Board and will take effect from July 31, 2025.
The resignations come a day after media reports suggested Sarma would step down following internal disagreements with the Board over a financial matter. Moneycontrol first reported the development, adding that Rao was also expected to resign by the end of July.
According to these reports, the differences stemmed from a Rs 1.53 crore expenditure in May on consultancy and related services—an amount said to be beyond the delegated powers of the bank’s whole-time directors and not ratified by the Board. The bank’s statutory auditors flagged the issue, noting that the amount may be recoverable from the directors concerned.
Meanwhile, the Board has appointed Raghavendra Srinivas Bhat as the Chief Operating Officer (COO) of the bank, effective July 2, 2025. Bhat has over three and a half decades of experience in banking, including more than a decade in senior leadership roles at Karnataka Bank.
The Bank has formed a search committee to identify suitable candidates for the position of a new managing director & CEO as well as a new executive director.