Mumbai: Uday Kotak, India’s richest banker, resigned Saturday as managing director and chief executive officer of Kotak Mahindra Bank Ltd., giving up the reins earlier than expected to take on the role of a non-executive director.
Dipak Gupta, the joint managing director, will take charge as interim MD and CEO until December 31, subject to the approval of the Reserve Bank of India and members of Kotak Mahindra Bank, according to an exchange filing. The lender has already submitted an application to the central bank for approval of the new MD and CEO with effect from January 1, 2024.
In a handwritten letter attached to the filing, the billionaire founder of Kotak Mahindra Bank said he decided to resign before his term expires on December 31 after thinking it over for “some time.” He cited personal reasons for the decision and said he believes “it is the right thing for the institution.” Kotak said he still retained the “lonely place of being a founder, promoter and significant shareholder” in the bank he founded and that bears “our family name.”
“With a view to sequencing this process from a transition and stability perspective, I have decided to take this action after completion of the financial year and the AGM for FY2023,” Kotak said in the letter. “The bank has taken necessary steps on succession and we await the RBI’s decision.”
The financier had engaged consulting firm Egon Zehnder to lead a global search for a CEO and its top executives Shanti Ekambaram and K.V.S. Manian were the internal candidates for the job.
The RBI has a final say on appointing heads of the nation’s banks though the boards decide on the shortlist of candidates. India has tightened rules limiting bank CEOs’ tenure to a maximum of 15 years and has been reviewing the stakes that the lenders hold in insurers in order to strengthen the nation’s financial system.
Kotak said that over the next few months he would be occupied with family commitments and “consequently, considering the proximity of these events to the end of my tenure, I though it appropriate to hand over the baton and stagger the transition.”