Karnataka Bank CEO Srikrishnan Sarma Expected to Resign Over Boardroom Disputes
Karnataka Bank’s chief executive officer, Srikrishnan Hari Hara Sarma, is likely to step down following internal disagreements with the bank’s board regarding a contentious expenditure. Executive Director Sekhar Rao, the bank’s next senior-most official, is also expected to exit by July 30.
Sources familiar with the situation revealed that the dispute stemmed from a ₹1.53 crore expenditure involving the engagement of a consultant for technological and credit process upgrades. This cost, flagged by the bank’s statutory auditors, reportedly exceeded the spending authority of the bank’s whole-time directors and was not approved by the board.
The auditors stated that the amount must be recovered from the concerned directors, drawing regulatory attention to the issue. However, insiders confirm that corrective steps have been taken and communicated to the Reserve Bank of India.
While Sarma continues in his role for now, a formal resignation announcement is anticipated pending board approval and regulatory notification. Efforts to reach both the bank and Sarma for comment remained unanswered at the time of publication.
Sarma was appointed in May 2023 as Karnataka Bank’s first external CEO, following a headhunting-led selection process. A seasoned banker with over four decades of experience, his career includes tenures at Bank of America, HDFC Bank, and Jio Payments Bank. Under his leadership, the bank raised ₹1,500 crore in capital, including a ₹600 crore QIP last year.
Industry observers note that clashes between Karnataka Bank’s board and executive leadership are not new. Former MD & CEO MS Mahabaleshwara also saw his term cut short due to similar issues. The current friction is attributed to diverging visions for the bank’s future, particularly with Sarma’s aggressive growth-oriented strategy.
