Karnataka Bank share takes a sharp dive as MD & CEO Srikrishnan Hari Hara Sarma and Executive Director Sekhar Rao resign. Leadership shake-ups, governance issues, and financial irregularities contribute to market unrest.
Leadership Shake-up Triggers Strategic Pivot
In a sudden and consequential turn of events, Karnataka Bank faced a leadership void as both MD & CEO Srikrishnan Hari Hara Sarma and Executive Director Sekhar Rao tendered their resignations on Saturday. This dual exit marks a defining moment in the bank’s modern history. To stabilize its core operations, the board quickly appointed seasoned banker Raghavendra Srinivas Bhat as the new Chief Operating Officer (COO), with his term set to begin on July 2.
Governance Rifts Deepen Internal Discord
The departure of the top brass is the culmination of a year-long governance discord. In May, tensions reached a boiling point when statutory auditors flagged unapproved expenses exceeding permissible thresholds. The board’s decision to reject these financial transgressions and demand restitution highlighted a rare and publicized conflict between the executive leadership and board oversight, eroding the long-held decorum within the institution.
Financial Irregularities and Forensic Audits Intensify Scrutiny
February saw further reputational erosion as Karnataka Bank was forced to reverse ₹18.87 crore worth of questionable international UPI transactions due to reconciliation anomalies. This incident prompted a forensic audit sanctioned by both the RBI and the bank’s internal board. Although the bank has since claimed that the audit findings have been “amicably resolved,” the episode added weight to growing concerns about internal controls and fiscal discipline.
Karnataka Bank Share Suffers Steep Market Blow
Investor sentiment soured dramatically on June 30, 2025, as Karnataka Bank share value plunged by up to 8.5%—its most significant drop in five months. The session began with a 4% slump and worsened rapidly following the executive exits, underscoring widespread investor apprehension. The Karnataka Bank share collapse reflects not only leadership concerns but also deeper questions surrounding governance and transparency.
Search for Stability and Strategic Continuity
In response to the upheaval, a dedicated search committee has been formed to scout for fitting successors to the MD & CEO and executive director roles. Meanwhile, Raghavendra Srinivas Bhat steps in as COO, bringing over four decades of institutional experience. Having joined Karnataka Bank in 1981, Bhat’s expertise spans HR, digital and core IT systems, treasury, forex, and rural banking sectors—marking him as a stalwart insider poised to navigate the transitional phase.
The bank also addressed the “Emphasis of Matter” noted in its FY25 audited financial statements, stating that the issue has been resolved through internal deliberations. In a statement aimed at restoring market confidence, the bank emphasized that it remains well-capitalized and committed to its transformational path, ensuring stakeholders of its ongoing stability.
A brief history of banks and Karnataka Bank Share and conclusion:
Karnataka Bank, established on February 18, 1924, in Mangaluru, is one of India’s leading private sector banks with a rich legacy spanning over a century. Founded by B. R. Vysaray Achar and other visionaries, the bank was born during the freedom struggle with a mission to support local enterprise and economic self-reliance. Over the decades, Karnataka Bank expanded its footprint across India, offering a wide range of banking and financial services.
Karnataka Bank shares were first listed on the Indian stock market in 1971. Since then, the bank has been publicly traded on major Indian exchanges, including the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Being a listed entity has enabled Karnataka Bank to expand its investor base and maintain transparency through regulatory disclosures, enhancing its credibility in the financial sector.
