Mangalore-based Karnataka Bank has informed that its Managing Director and Chief Executive Officer (MD and CEO) and its Executive Director (ED) have resigned from their positions, citing personal reasons among other factors. The board of the bank has accepted their resignations.

It has been learnt that differences between MD, ED and the bank's Board over a certain expenditure incurred by the lender are said to have contributed to the CEO's decision to step down. However, as per the bank, "On the notes to accounts contained in the audited financial statements for FY25 leading to the emphasis of matter in the auditor's report, the bank states that it has been discussed and amicably resolved". It is to be noted that the statutory auditors of the bank had said in their report on May 14: "We draw attention to Note 14 of the Standalone Financial Results, which states that the total expenditure includes an amount of Rs. 1.16 crore incurred in connection with engaging consultants & other revenue expenditure and total fixed assets include capital expenditure amounting to Rs. 0.37 crore, which were incurred beyond the delegated powers of the whole-time directors and was not ratified by the Board. Consequently, the said amount is recoverable from the concerned directors. However, no effect has been given in the accounts in respect of the recoverable amount. Our opinion is not modified in respect of this matter".

While MD cited personal reasons, including his decision to relocate to Mumbai, his resignation will be effective from July 15. ED, who cited his inability to relocate to Mangaluru and other personal reasons, will step down with effect from July 31.

Following the departure of the MD&CEO and ED, the bank has formed a search committee to identify suitable candidates for both roles.
 

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