Karnataka Bank MD and Executive Director resign
Karnataka Bank Managing Director and CEO Srikrishnan Hari Hara Sarma and Executive Director Sekhar Rao have resigned from their positions.
Accepting their resignations, the Board of Directors of the Bank on Sunday constituted a search committee to identify a new MD & CEO and Executive Director, said a late-night release from the Bank.
While Mr. Sarma's resignation would be effective from July 15, Mr. Rao's resignation would be effective from July 31. They had joined the Bank on June 9, 2023 and February 1, 2023, respectively.
The release quoted Mr. Sarma, citing personal reasons, including his decision to relocate back to Mumbai, as the reason for his resignation. Mr. Rao has cited the inability to relocate to Mangaluru and other personal reasons.
The Bank has appointed an experienced senior banker as the Chief Operating Officer (COO), who will take charge on July 2. Substitute arrangements are also being made, subject to the Regulator's approval.
On the Notes to Accounts contained in the audited Financial Statements for the FY25 leading to an Emphasis of Matter in the Auditor's Report, the Bank stated that it has been discussed and amicably resolved. The Bank continues to take necessary steps to ensure operational stability and assures various stakeholders that it is well capitalised and continues to be sound as hitherto. The transformational journey embarked upon by the Bank would continue unhindered, the release added.
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Time of India
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MUMBAI: Karnataka Bank on Saturday saw both its MD & CEO, Srikrishnan Hari Hara Sarma, and executive director, Sekhar Rao, resign, marking a major leadership shake-up for the century-old private lender. To maintain operational stability during the transition, the board appointed Raghavendra Srinivas Bhat as COO, effective July 2. The leadership exits come after a year of growing strain within the bank. Governance tensions came to a head in May when the bank's auditors flagged certain overlimit expenses. The board refused to ratify the expenditures and asked for the amounts to be recovered. The standoff between the board and management that followed was considered unprecedented for the institution. Adding to the pressure, Karnataka Bank in Feb had to reverse Rs 18.87 crore worth of suspicious cross-border UPI transactions due to reconciliation failures. A forensic audit was ordered in April at the direction of the board and the RBI. The bank has since stated that the audit observations have been amicably resolved and that it remains well-capitalised. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
The Hindu
6 hours ago
- The Hindu
Karnataka Bank MD and Executive Director resign
Karnataka Bank Managing Director and CEO Srikrishnan Hari Hara Sarma and Executive Director Sekhar Rao have resigned from their positions. Accepting their resignations, the Board of Directors of the Bank on Sunday constituted a search committee to identify a new MD & CEO and Executive Director, said a late-night release from the Bank. While Mr. Sarma's resignation would be effective from July 15, Mr. Rao's resignation would be effective from July 31. They had joined the Bank on June 9, 2023 and February 1, 2023, respectively. The release quoted Mr. Sarma, citing personal reasons, including his decision to relocate back to Mumbai, as the reason for his resignation. Mr. Rao has cited the inability to relocate to Mangaluru and other personal reasons. The Bank has appointed an experienced senior banker as the Chief Operating Officer (COO), who will take charge on July 2. Substitute arrangements are also being made, subject to the Regulator's approval. On the Notes to Accounts contained in the audited Financial Statements for the FY25 leading to an Emphasis of Matter in the Auditor's Report, the Bank stated that it has been discussed and amicably resolved. The Bank continues to take necessary steps to ensure operational stability and assures various stakeholders that it is well capitalised and continues to be sound as hitherto. The transformational journey embarked upon by the Bank would continue unhindered, the release added.
Time of India
7 hours ago
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Both MD & ED of Karnataka Bank resign late Sunday, ending speculations
Karnataka Bank managing director Srikrishnan Hari Hara Sarma and executive director Sekhar Rao have stepped down from their respective positions after a month-and-a-half of the auditors of the bank raising red flags about some expenses incurred by them going beyond their delegated powers and which were not approved by the board. Both Srikrishnan and Rao cited personal reasons for their abrupt resignations. The bank announced it late Sunday evening in regulatory filings to stock exchanges, bringing to an end of the speculation that both of them would be quitting before June 30. The board of the private sector lender has accepted both the resignations. The bank has formed a search committee to identify candidates for both the top positions. For the time being, the bank has appointed Raghavendra Srinivas Bhat as the chief operating officer who will assume charge on July 2 to run the show. "Additionally, substitute arrangements are also being made subject to the regulator's approval," the bank said. Live Events Srikrishnan's resignation will be effective from July 15, while Rao's decision will come into force on July 31. Srikrishnan said he would like to relocate back to Mumbai in his resignation letter while Rao cited his inability to relocate to Mangaluru and other personal reasons. Announcing the development, the bank stated that the issues raised by the auditors in the notes to accounts contained in the audited financial statements for FY25 "has been discussed and amicably resolved". "The bank continues to take necessary steps to ensure operational stability and assures various stakeholders that it is well capitalised and continues to be sound as hitherto," it said. The auditors, Ravi Rajan & Co LLP and RGN Price & Co, stated in their report that the bank had incurred Rs 1.16 crore for hiring consultants and Rs 37 lakh under revenue and capital expenditure "which were incurred beyond the delegated powers of the whole-time directors and was not ratified by the board". "Consequently, the said amount is recoverable from the concerned directors. However, no effect has been given in the accounts in respect of the recoverable amount. Our opinion is not modified in respect of this matter," they wrote on May 14 in the report on the audit of the consolidated financial results. The issue raised serious concerns on the corporate governance standards in the bank. It has also highlighted the friction brewed between the whole-time directors and other members of the board. "It's a very simple matter. The amounts are very insignificant, but it's just the governance part, the bank had to take this into account, Srikrihnan said on May 21 responding to questions raised by analysts on the matter. "If there is anything which is incurred beyond the delegated authority, obviously there are explanations and making sure that those are either ratified or we will have to kind of make sure that the bank has a very conclusive part related to that, so that has been done and which is why it is a simple matter which is an emphasis of matter, which is normal and the amounts are not at all large," the MD had said.
