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Indian Express
an hour ago
- Business
- Indian Express
Why Karnataka Bank's top brass stepped down amid auditor red flags
The Board of Directors of 100-year old Karnataka Bank on Sunday accepted the resignation of the bank's Managing Director and CEO Srikrishnan Hari Hara Sarma and Executive Director Sekhar Rao amid red flags raised by the auditors about certain spending. Sarma has cited personal reasons, including his decision to relocate back to Mumbai, for his resignation. His resignation will be effective from July 15. Rao submitted his resignation citing inability to relocate to Mangaluru and other personal reasons. His resignation will be effective from July 31. While the Mangaluru-based bank, with 957 branches, has no specific promoter, the entire stake is held by public, NBFCs, FPIs and mutual funds. As of the quarter ended March 31, 2025, Karnataka Bank reported total deposits of Rs 1.04 lakh crore. The bank's shares fell by 5.51 per cent to Rs 196.25 on the BSE on Monday morning session. The resignations of Karnataka Bank's MD and ED came roughly six weeks after the bank's auditors raised concerns over certain expenditures made by the two executives. These expenses, which exceeded their delegated authority and were not approved by the board, included Rs 1.53 crore in spending deemed recoverable from the concerned directors—comprising Rs 1.16 crore on consultants and Rs 37 lakh on revenue and capital items. While the official reason cited for their exit was personal, including relocation-related factors, the timing suggests deeper issues, said an analyst, adding that the auditor's findings pointed to governance lapses and internal friction, prompting uncertainty among investors and triggering a broader leadership shake-up at the bank. On the Notes to Accounts contained in the audited Financial Statements for the FY25 leading to emphasis of matter in the Auditor's Report, the bank stated that 'it has been discussed and amicably resolved'. The bank has formed a search committee to identify suitable candidates for the position of a new Managing Director & CEO as well as a new Executive Director. 'The bank has appointed an experienced senior banker as the Chief Operating Officer (COO) who will assume charge on July 02, 2025. Additionally, substitute arrangements are also being made subject to the regulator's approval,' the bank said in an exchange filing. '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 will continue unhindered,' the filing said.
Business Standard
6 hours ago
- Business
- Business Standard
Karnataka Bank drops after MD & CEO, Srikrishnan Hari Hara Sarma resigns
Karnataka Bank declined 7.27% to Rs 192.60 after the bank's board has accepted the resignation of managing director (MD) & chief executive officer (CEO), Srikrishnan Hari Hara Sarma, effective from 15 July 2025. Srikrishnan Hari Hara Sarma resigned citing personal reasons, including his decision to relocate back to Mumbai. The banks executive director, Sekhar Rao has also submitted his resignation citing inability to relocate to Mangaluru and other personal reasons. The resignation has been accepted by the board and will be effective from 31 July 2025. Additionally, the board has approved the appointment of Raghavendra Srinivas Bhat as the chief operating officer (COO), effective from 2 July 2025. The bank has formed a search committee to identify suitable candidates for the position of a new MD & CEO as well as a new executive director. Karnataka Bank, a leading 'A' Class Scheduled Commercial Bank in India, was incorporated on 18th February 1924 at Mangaluru. The Bank fell 3.90% to Rs 199.40 after the bank's net profit fell 7.97% year-on-year to Rs 252.37 crore in Q4 March 2025. The bank's total income rose 2.55% YoY to Rs 2,686.69 crore in Q4 FY25.
Entrepreneur
7 hours ago
- Business
- Entrepreneur
Karnataka Bank MD Srikrishnan Sarma and ED Sekhar Rao Step Down
You're reading Entrepreneur India, an international franchise of Entrepreneur Media. The Board of Directors of Karnataka Bank has accepted the resignation of its Managing Director and CEO, Srikrishnan Hari Hara Sarma. His resignation, due to personal reasons and a decision to relocate to Mumbai, will be effective from July 15, 2025. The Bank's Executive Director, Sekhar Rao, has also stepped down citing personal reasons, including the inability to relocate to Mangaluru. His resignation will take effect from July 31, 2025. In response, the Bank has set up a Search Committee to identify suitable candidates for both leadership roles. An experienced senior banker has been appointed as Chief Operating Officer (COO), who will take charge on July 2, 2025. Other interim arrangements are being made, pending regulatory approval. Addressing concerns raised in the Auditor's Report for FY25, the Bank confirmed that the issues noted in the "Emphasis of Matter" section have been discussed and amicably resolved. Karnataka Bank has assured stakeholders that it remains financially sound and well capitalised. The leadership transition will not impact its ongoing transformation efforts, and the Bank remains committed to ensuring operational stability and long-term growth.
Time of India
9 hours ago
- Business
- Time of India
Karnataka Bank shares drop 7% after top management resignations
Shares of Karnataka Bank fell over 7% on Monday to Rs 192, following a major leadership shake-up. The decline came after the bank's Board of Directors accepted the resignations of its MD & CEO, Srikrishnan Hari Hara Sarma , and Executive Director, Sekhar Rao. Sarma, citing personal reasons and a planned move back to Mumbai, will step down effective July 15, 2025. Rao, citing personal commitments and his inability to relocate to Mangaluru, will exit by July 31, 2025. In response, the Board has formed a Search Committee to scout for suitable successors for both leadership roles. To ensure operational continuity, the bank has appointed a senior banker as Chief Operating Officer (COO), who will assume charge from July 2, 2025, pending regulatory approval. The twin resignations of key leadership figures in quick succession have raised concerns among investors, triggering a sharp sell-off in the stock. The focus now shifts to the bank's succession planning and interim management stability as the market awaits further clarity on new appointments. Technical Outlook & Valuation Snapshot: Karnataka Bank Live Events Karnataka Bank shares are trading at Rs 192, marking a 7.30% decline from the previous close of Rs 207.91, reflecting bearish sentiment in Monday's session. From a technical perspective, the stock is showing signs of negative momentum. It is currently trading below 7 out of 8 key Simple Moving Averages (SMAs) — including the 5-day to 200-day averages — except the 100-day SMA, where it remains marginally above. This trend suggests potential weakness in near-to-medium-term price action. The Relative Strength Index (RSI-14) stands at 59.7, indicating a neutral zone. An RSI below 30 typically signals an oversold condition, while a reading above 70 suggests overbought territory. On the valuation front, the stock appears undervalued. Karnataka Bank is currently trading at a Price-to-Earnings (PE) ratio of 5.73, compared to its 5-year average PE of 6.3. The forward PE, based on analyst estimates, is projected at 6.0, indicating potential upside if earnings meet expectations. Overall, while technical indicators suggest caution in the short term, valuations remain attractive for longer-term investors tracking earnings stability and potential leadership transitions.
Economic Times
9 hours ago
- Business
- Economic Times
Karnataka Bank shares drop 7% after top management resignations
Karnataka Bank shares: The bank's Board of Directors approved the departure of its MD & CEO. Karnataka Bank's shares plunged over 7% following the resignations of MD & CEO Srikrishnan Hari Hara Sarma and Executive Director Sekhar Rao. The Board has formed a Search Committee for replacements and appointed a COO to ensure continuity. While technical indicators suggest short-term caution, the bank's valuation appears attractive for long-term investors. Tired of too many ads? Remove Ads Technical Outlook & Valuation Snapshot: Karnataka Bank Tired of too many ads? Remove Ads Shares of Karnataka Bank fell over 7% on Monday to Rs 192, following a major leadership shake-up. The decline came after the bank's Board of Directors accepted the resignations of its MD & CEO, Srikrishnan Hari Hara Sarma , and Executive Director, Sekhar citing personal reasons and a planned move back to Mumbai, will step down effective July 15, 2025. Rao, citing personal commitments and his inability to relocate to Mangaluru, will exit by July 31, response, the Board has formed a Search Committee to scout for suitable successors for both leadership roles. To ensure operational continuity, the bank has appointed a senior banker as Chief Operating Officer (COO), who will assume charge from July 2, 2025, pending regulatory twin resignations of key leadership figures in quick succession have raised concerns among investors, triggering a sharp sell-off in the stock. The focus now shifts to the bank's succession planning and interim management stability as the market awaits further clarity on new appointments. Karnataka Bank shares are trading at Rs 192, marking a 7.30% decline from the previous close of Rs 207.91, reflecting bearish sentiment in Monday's a technical perspective, the stock is showing signs of negative momentum. It is currently trading below 7 out of 8 key Simple Moving Averages (SMAs) — including the 5-day to 200-day averages — except the 100-day SMA, where it remains marginally above. This trend suggests potential weakness in near-to-medium-term price Relative Strength Index (RSI-14) stands at 59.7, indicating a neutral zone. An RSI below 30 typically signals an oversold condition, while a reading above 70 suggests overbought the valuation front, the stock appears undervalued. Karnataka Bank is currently trading at a Price-to-Earnings (PE) ratio of 5.73, compared to its 5-year average PE of 6.3. The forward PE, based on analyst estimates, is projected at 6.0, indicating potential upside if earnings meet while technical indicators suggest caution in the short term, valuations remain attractive for longer-term investors tracking earnings stability and potential leadership transitions.
