Karnataka Bank CEO Resigns Amid Boardroom Tensions

Karnataka Bank’s CEO Srikrishnan Hari Hara Sarma is expected to step down, following reported differences with the board and Executive Director Sekhar Rao , who is also set to resign by July 30. The tension reportedly stems from an expenditure of ₹1.53 crore related to consultancy services for technology upgrades and credit operations, which was not approved by the board and flagged by statutory auditors. The auditors noted that the expense was beyond the authority of whole-time directors and could be recoverable from them. While the bank has taken steps to address the issue and inform regulators, the incident has highlighted growing friction between the board and management. Sarma, a seasoned banker with experience at HDFC, Yes Bank, and Jio Payments Bank, was appointed as the first external CEO in May 2023. His tenure saw the bank raise ₹1,500 crore in capital but also faced pushback from the board over his aggressive growth strategy. This marks another instance of leadership-board tensions at the bank, echoing past conflicts during the tenure of former MD & CEO MS Mahabaleshwara. A formal resignation announcement is expected soon after board approval and communication with the Reserve Bank of India. This also highlights the possible Corporate Governance issues that prevail in Indian corporate Landscape.