Beyond the crisis: IndusInd Bank’s aggressive hunt for a brand-new leadership

These include roles like the chief financial officer, leaders for retail and corporate loan verticals, and executives in the risk and internal audit functions. The hiring will serve a dual purpose—Apart from filling open posts, some hires are meant to staff the second rung of executives, or those just below the chief executive.

On 10 March, the private sector lender acknowledged discrepancies in its derivatives portfolio in the October quarter, sparking a 27% crash in its shares the next day. The incorrect accounting of derivative trades led to a ₹1,959-crore hole in its books. The bank has now seemingly gained the confidence of the regulator, with Reserve Bank of India governor Sanjay Malhotra recently noting that on the whole, “the bank is doing well”.

Notice periods

IndusInd has already rolled out several offers, one of the three people said, adding the new hires may join from September, given the 90-day notice period at most organizations. Given all the recent negative news around IndusInd, candidates have better leverage in the recruitment process and are asking for a minimum of 30% hike in many cases, as opposed to a standard 20-25% hike, the person said on the condition of anonymity.

“People are ready to join for the money, but they aren’t the best. Offers have been given, and we will only come to know in a few months whether they join or are retained by the companies they work for,” the person added.

The bank has also tasked headhunters to build a talent pipeline of CXOs and a level below who can step in for the top roles as part of succession planning, said the people cited above.

Succession pipeline

“The firm has realized that it does not have a succession pipeline in place, some of the senior management will retire in a year or two, and a new crop of leaders is needed,” said the second person.

Some of the executive search firms working on the mandates include Hunt Partners and the Indian arm of Transearch International. As per a Reuters report on 30 June, the bank has submitted the names of potential CEOs to RBI.

The post fell vacant after erstwhile CEO Sumant Kathpalia quit in April, over a month after the bank disclosed discrepancies in its derivatives portfolio.

Early nod?

While the regulator usually seeks names six months in advance as part of the approval process, given the circumstances, it could expedite its vetting.

“We are engaged with leading private sector banks in India to onboard best-in-class leadership talent across key functions. We are unable to provide specifics of our engagements because of client confidentiality,” a spokesperson for Hunt Partners said in response to a query.

Emails sent to Transearch and IndusInd Bank remained unanswered.

Meanwhile, analysts are tracking the appointment of the new CEO. Analysts at Motilal Oswal said on 3 July that clarity on the appointment of the new chief executive and the strategic direction under their leadership will be key to providing better visibility on the bank’s growth outlook and overall strategy.

Quick mandates

“Given ongoing uncertainties and continued softness in operating performance, we reiterate our neutral rating,” it said.

According to headhunters aware of the bank’s talent search, some of the mandates need to be closed within a couple of quarters. “There will be transitions as the new CEO will also bring in some changes in the top deck. New teams will get formed even in the second-rung roles,” said the third person.

The hunt for top leaders in the banking sector is getting competitive, with a clutch of lenders looking for successors. In fact, last week, Mint reported that the board of Yes Bank Ltd paused the search for a CEO since the banking regulator is still in the process of clearing its ongoing stake sale to Japan’s SMBC Group.