Shares of India's IndusInd Bank fell nearly 6% on Monday to their lowest level since July 2022, after the country's central bank approved a shorter extension to its CEO's tenure, raising potential leadership transition risks and business uncertainty.

An extension of only one year appears to signal RBI’s continued discomfort or lack of full confidence, Citi said in a note.

IndusInd Bank shares are down 12 per cent in the past one month and 35 per cent in the past six months. The stock has corrected sharply on concerns pertaining to MFI and the CEO’s reappointment.

Indian private lender IndusInd Bank said on Friday it had received approval from the country's central bank to reappoint Sumant Kathpalia as its chief executive officer and managing director for a period of one year.

UBS also fears that a lack of strategic direction and lower growth are likely to result in a further de-rating for the IndusInd Bank and as a result, it has given the lender its lowest price target on the street.

The Reserve Bank of India approved a one-year reappointment of Sumant Kathpalia as MD and CEO of IndusInd Bank, effective March 2025, reducing the tenure initially proposed by the board. Kathpalia, with 37 years of experience,

Sumant Kathpalia is a career banker with over 37 years of rich experience in large multi-national banks such as Citibank, Bank of America and ABN AMRO prior to joining Induslnd Bank. At IndusInd Bank,