Karur Vysya Bank , a prominent Indian banking institution, has taken legal action against the Income Tax Department's decision to reopen tax assessments for three consecutive financial years. The bank has filed writ petitions before the Madurai bench of the Madras High Court, contesting the reopening of income tax assessments for the assessment years 2020-21, 2021-22, and 2022-23.

Legal Challenge Details

According to a regulatory filing by Karur Vysya Bank on September 23, 2025, the bank received notices under Section 148 and orders under Section 148A(3) from the jurisdictional assessing officer of the Income Tax Department. These notices and orders initiated the process of reopening assessments for the aforementioned years.

In response to these actions by the tax authorities, Karur Vysya Bank filed writ petitions on September 22, 2025. The bank has expressed confidence in its legal position, stating that it believes it has "adequate legal grounds to defend the issues involved" in the reopening proceedings.

Financial Impact and Bank's Stance

Despite the ongoing legal challenge, Karur Vysya Bank has reassured its stakeholders about the potential impact of this development. In its disclosure to the stock exchanges, the bank stated:

"The Bank believes that the above matter is not likely to have any material impact on its financial position or operations."

This statement suggests that Karur Vysya Bank does not anticipate any significant financial repercussions from the tax assessment reopening or the related legal proceedings.

Regulatory Compliance

In compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Karur Vysya Bank has duly informed the National Stock Exchange of India Ltd and BSE Limited about this development. The bank has also provided additional disclosures as required under SEBI circular dated November 11, 2024.

As the legal proceedings unfold, stakeholders and market observers will likely keep a close watch on any further developments in this case. The outcome of these writ petitions could have implications not only for Karur Vysya Bank but potentially for other financial institutions facing similar tax-related challenges.

Karur Vysya Bank (KVB) recently participated in the "BFSI yatra" Investors Conference organized by ICICI Securities in Chennai, where the bank's top management team engaged with institutional investors and analysts to discuss various aspects of the bank's operations and market position.

Conference Participation

The bank's delegation at the conference included Executive Director Sankar B, Chief Financial Officer R Ramshankar, Chief Risk Officer Jatla Sivaramakrishna, and Head of Commercial Banking Group K P Muthukumar. They met with representatives from 12 prominent firms, including Bandhan AMC, Axis Asset Management, Franklin Templeton, and others.

U.S. Tariff Impact Disclosure

During the conference, Karur Vysya Bank provided insights into its exposure to U.S. tariff-impacted segments:

Strategic Portfolio Management

The bank highlighted its proactive approach to managing potential risks:

• Textile portfolio strategically reduced from 8.00% in March 2021 to 5.43% in June 2025
• Total MSME exposure to U.S. exports: 0.56% of total advances
• Exposure where U.S. exports account for over 60% of borrowers' annual turnover: 0.56% of total advances

Textile Sector Focus

Given the significance of the textile sector in the bank's portfolio:

The bank noted that the impact is primarily seen in Apparel & Home-textile exports, where its exposure is minimal at 0.11%.

Risk Management and Economic Outlook

Karur Vysya Bank emphasized its robust risk management practices:

• Focus on seasoned borrowers, diversified segments, and granularity
• Optimization of risk and reward
• Adequate provisioning for the textile segment, which has faced recent demand pressures

The bank expressed confidence in the resilience of the Indian economy, citing potential strategies to mitigate the impact of U.S. tariffs:

• Strategic shift of exports to other countries
• Increased focus on the domestic market
• Free Trade Agreements (FTAs) with the UK and other economies

As global trade dynamics continue to evolve, Karur Vysya Bank's disclosures provide valuable insights into its risk exposure and strategic positioning in the face of changing economic conditions.