K'taka Bank MD & exec director quit

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.