New Delhi, March 10 -- IndusInd Bank Ltd's shares dropped to their lowest in nearly three years after the Reserve Bank of India cut the lender's proposed three-year extension for managing director and chief executive officer Sumant Kathpalia to one year.

This isn't the first time RBI has disagreed with banks on the tenure of their top chief.

In 2023, the regulator approved a two-year extension for Kathpalia whereas IndusInd Bank's board had approved his reappointment for three years. In 2021, the regulator allowed a year's extension for RBL Bank Ltd's MD and CEO Vishwavir Ahuja as against the board's approval of his reappointment for three years.

Ahuja had led RBL Bank for more than a decade at the time. Kathpalia has been with IndusIn...