Karnataka Bank has reassured its stakeholders that its commitment to transparency and ethical governance remains unwavering.

The bank informed stock exchanges in a media release, that it is well-capitalised with a capital adequacy ratio (CAR) of over 19.85 per cent, reflecting the soundness of the bank’s financial position and robust risk management practices.

“Karnataka Bank would like to reassure all its valued customers and stakeholders that the safety and security of depositors’ money has always been, and will continue to be, our utmost priority. We wish to reiterate that the bank remains strong, resilient, and committed to upholding the trust placed in us over many decades,” the statement said.

“The bank’s fundamentals remain strong, and our commitment to transparency, customer service, and ethical governance remains unwavering,” the statement added.

Urging the public and customers to rely only on official communications from the bank, it asked them to avoid being misled by rumours which intend to cause unnecessary panic.

The bank informed the stock exchanges late Sunday evening that the Board of Directors accepted the resignation of Managing Director and CEO, Srikrishnan Hari Hara Sarma. His resignation will be effective from July 15, 2025. Sarma cited personal reasons, including his decision to relocate back to Mumbai, for his resignation.

The board also informed the resignation of the bank’s Executive Director, Sekhar Rao, in a stock exchange filing late Sunday evening. He had submitted his resignation citing inability to relocate to Mangaluru and other personal reasons. The resignation has been accepted by the board and will be effective from July 31, 2025, it said.

The bank informed the stock exchanges that it has formed a search committee to identify suitable candidates for the positions of a new Managing Director and CEO and Executive Director.

It is to be noted here that the statutory auditors of the bank — Ravi Rajan and Co LLP and RGN Price and Co — 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 ₹1.16 crore incurred in connection with engaging consultants & other revenue expenditure and total fixed assets include capital expenditure amounting to ₹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.”

The notes to accounts contained in the audited financial statements for 2024-25 led to emphasis of matter in the auditor’s report, which the bank informed stock exchanges that it has been discussed and amicably resolved.

The scrip of the bank closed at ₹195.75 on BSE on Monday against the previous ₹207.70, down 5.75 per cent. The scrip had touched a low of ₹190.05, registering a decline of 8.5 per cent during the day.

Published on June 30, 2025