In a significant governance development, shareholders of IndusInd Bank have voted against a proposal by promoter entity IndusInd International Holdings Ltd (IIHL) to induct two nominee directors to the bank’s board. The resolution, which required an amendment to the Articles of Association, was defeated at the bank’s Annual General Meeting (AGM) held on August 29, with 54.04 percent of shareholders voting against it.
Despite prior approval from both the Reserve Bank of India (RBI) and the bank’s board, the proposal failed to gain shareholder support. The two proposed directors were to be classified as non-executive, non-independent nominees. Proxy advisory firms had reportedly raised concerns over governance implications, which IIHL President and CEO Moses Harding described as a “misinterpretation” of the resolution’s intent.
Harding emphasized that IIHL has supported IndusInd Bank for over three decades without seeking board representation. He cited examples such as the promoter’s subscription to 1.57 crore warrants at ₹1,709 per share in 2021—well above the market price at the time—and capital support during the 2008 financial crisis and the COVID-19 pandemic.
Under RBI’s revised ownership and governance norms, IIHL has reduced its stake in the bank from over 90 percent in 1994 to approximately 15 percent. The promoter has now sought regulatory approval to increase its holding to 26 percent, in line with the central bank’s acceptance of the Internal Working Group’s recommendations.
While the board nominee proposal was rejected, shareholders overwhelmingly approved the appointment of veteran banker Rajiv Anand as Managing Director and Chief Executive Officer. Anand officially took charge on August 25 for a three-year term. His appointment is seen as pivotal in steering the bank through a period of financial recovery following a ₹1,960 crore loss linked to misaccounted internal derivative trades earlier this year.
Anand, a Chartered Accountant with over 35 years of experience, previously served as Deputy Managing Director at Axis Bank and has held leadership roles across retail and wholesale banking. His immediate mandate includes restoring internal controls, rebuilding investor confidence, and guiding the bank toward stable growth.
The AGM also cleared other key resolutions, including the issuance of long-term bonds and debt securities on a private placement basis. The outcome reflects a nuanced balance between shareholder oversight and promoter influence, as IndusInd Bank enters a new phase of leadership and governance reform.
