Former IndusInd Bank CEO Sumant Kathpalia has proposed to settle the insider trading case against him with the Securities and Exchange Board of India (SEBI), according to a report by The Economic Times. He has proposed a Rs 5.21 crore settlement to the regulator, documents reviewed by ET confirmed.
SEBI’s settlement mechanism enables individuals accused of regulatory breaches to resolve the issue by paying a settlement fee, without having to admit or deny the alleged wrongdoing.
SEBI action in insider trading probe
Earlier in May, SEBI had barred Kathpalia and four other senior officials of IndusInd Bank from accessing the securities markets over alleged insider trading. Per its interim order, SEBI had also impounded Rs 19.78 crore from the five individuals.
Besides Kathpalia, the other names in the order include Arun Khurana (Executive Director and Deputy CEO at the time), Sushant Sourav (Head of Treasury Operations), Rohan Jathanna (Head of GMG Operations), and Anil Marco Rao (CAO – Consumer Banking Operations).
The case pertains to a directive issued by the Reserve Bank of India (RBI) that had material implications for the Bank. SEBI’s investigation revealed that the executives traded using confidential insights obtained from internal evaluations of the RBI circular before it was publicly disclosed.
“All the Noticees… are hereby restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever, until further orders,” SEBI said in its interim ruling.
IndusInd Bank’s Q1FY26 performance
Earlier this month, IndusInd Bank had released its fiscal first quarter earnings report with a profit decline of 68 per cent year-on-year to Rs 684 crore. The drop came mainly on the back of higher provisions and a fall in asset quality. In the previous quarter, the private sector bank had reported a loss of Rs 2,236 crore, primarily due to discrepancies found in the bank’s derivatives book.
The private sector lender has been under scanner since it disclosed a Rs 1,580 crore discrepancy in its derivatives portfolio. IndusInd Bank has admitted to multiple accounting lapses, coupled with premature resignations of the top two executives. Sumant Kathpalia had resigned from the position on April 29.