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Private sector lender Karnataka Bank has seen an exodus of its top management in recent months, including its former MD and CEO SriKrishnan Harihara Sarma, former CFO Abhishek Baghchi, and Executive Director (ED) Sekhar Rao, creating a leadership crisis, as the bank is yet to get a permanent MD & CEO. There have been other resignations, too, including the Head of Wholesale Banking Giridhar Rajaram; Chief Product Officer Ramaswamy Subramanian; Product Head (asset & co-lending) Jaypalan M;Head of treasury RK Gurumurthy; and Head of Credit Marketing Department, Sreenivas Mylavarapu, say sources. voluntary retirement Anantha Padmanabha, a career Karnataka Bank employee and head of IT operations, took voluntary retirement from service just two years before his retirement. “Having dedicated over 30 years for the bank, a farewell for Anantha was organised where he got emotional and said his departure was unfair. Why would anyone retire from service with just two years left,” said a source requesting anonymity. The bank is now being run by long-term employees, including Raghavendra Bhat, who had retired from the bank as CGM and COO in 2019, and has now been appointed as the lender’s MD and CEO. The lender has re-appointed Chandra Shekhar as the Chief Business Officer after his retirement, while Raja BS has been promoted to the role of Chief Operating Officer. Karnataka Bank did not respond to businessline queries till press time. The RBI granted extension for a period of one month for Bhat, effective October 16, 2025, or until the appointment of a regular MD and CEO, whichever is earlier. Bhat assumed charge as MD and CEO of the bank on July 16, 2025, for three months. The bank is understood to have reached out to a veteran banker for the position, who has turned down the offer. It is not certain whether the lender’s nomination and remuneration committee has already sent candidates’ name for the MD and CEO position. The spate of exits began from June this year, when former CEO Sarma and ED Rao faced a rift with the bank’s board. The bank’s auditors had flagged that the lender spent ₹1.5 crore to engage with consultants and other purposes, an expenditure for which the board’s approval was not taken. The auditors suggested the bank take compensation for this expense from the two whole-time directors. Following the CEO and ED resignations, the bank relied on its long-term staff to lead. Even as the veteran bankers specialised in branch banking operations, they did not invest heavily in upgrading their digital banking infrastructure, sources say. delay in salary payments Further, there were complaints about delay in salary payments of lateral hirees. “Having worked for decades in the banking industry at large institutions, we cannot wait months on end to get our variable compensation. Everyone needs to believe in enhancing shareholder value. In today’s world, banking is becoming more and more digital, we cannot rely on old branch banking strategy,” the source cited above said. The century old bank’s capital adequacy ratio stood at 20.46 per cent as on June end, while its overall advances stood at ₹74,267 crore and deposits were at ₹1.03 lakh crore. Published on October 28, 2025
