Karnataka Bank CEO Srikrishnan Hari Hara Sarma resigned on Friday. The bank’s executive director, Sekhar Rao, is also likely to step down by July 30. The resignation is a result of some expenditure incurred by the bank, which became a bone of contention between Sarma, Rao and Karnataka Bank’s board, MoneyControl reported.
The bank has officially not made any statement confirming his resignation as of yet.
The differences between the bank’s CEO and board reportedly surfaced in May this year when its statutory auditors flagged that over ₹ 1.53 crore of expenditure in connection with engaging consultants and other purposes was incurred beyond the authorised powers of the bank’s whole-time directors. The same was not ratified by the bank’s board.
“Consequently, the said amount is recoverable from the concerned directors,” MoneyControl reported, citing the auditors’ note.
Some time ago, during the bank’s earnings call, in response to an investor’s question, the CEO 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. If there’s is anything incurred beyond delegated authority, there are explanations, and we ensure those are either ratified or addressed,” he had said, according to the Hindu Businessline. “There was some kind of interpretational or policy ambiguity, which has been corrected already. We will ensure it doesn’t happen again,” he had added.
Earlier in May, Karnataka Bank reported a marginal dip in its net profit for the financial year 2025 as its earnings decreased from ₹ 1,306.28 crore in the previous fiscal to ₹ 1,272.37 crore. In the fourth quarter of FY25, net profit nosedived to ₹ 252.37 crore, compared to ₹ 274.24 crore in Q4 of FY24.
