Karnataka Bank CEO Srikrishnan Sarma steps down due to differences with board

Karnataka Bank CEO Srikrishnan Sarma steps down due to differences with board

Mangalore Today News Network

Mangaluru, June 28, 2025: Karnataka Bank’s Chief Executive Officer (CEO) Srikrishnan Hari Hara Sarma is reportedly stepping down from his position. The bank’s Executive Director (ED) Sekhar Rao, the senior-most official after Sarma, is also expected to resign by July 30.

Sources indicate that differences between Sarma, Rao, and the bank’s board over certain expenditures incurred by the lender prompted the CEO to consider his resignation. An official announcement is awaited, pending board approval and communication to the Reserve Bank of India (RBI).

An email sent to the bank seeking clarification remained unanswered at the time of publication, as did a WhatsApp message to Sarma.

The issue reportedly arose in May, when the bank’s statutory auditors flagged an unapproved expenditure of ₹1.53 crore related to consultancy services and other purposes. The amount, incurred for technology enhancements and revamping credit verticals, was beyond the approval authority of the whole-time directors and was not ratified by the board.

In their notes, the auditors stated, “The said amount is recoverable from the concerned directors.” This observation drew regulatory attention. A source close to the matter indicated that corrective actions have since been taken and communicated to the regulator.

Sarma, a veteran banker with over 40 years of experience, was appointed as the bank’s first external CEO in May 2023 for a three-year term. His appointment followed a rigorous selection process involving recommendations from external headhunters.

Unlike Sarma, previous CEOs of Karnataka Bank had risen through the ranks internally. His tenure marked a shift in leadership style, aimed at driving modernization and strategic change.

The bank has yet to make an official statement on the matter. Further updates are expected in the coming days.