Quite unexpectedly, Uday Kotak, Managing Director and CEO of Kotak Mahindra Bank, resigned on September 2, 2023. In a handwritten letter, he tendered his resignation to the bank’s chairman, saying: “I have considered this decision for some time and believe it is the right thing to do for the institution”.
Kotak resigned from the bank effective September 1, 2023, four months ahead of his term, which is said to end on December 31, 2023.
As an interim arrangement, Dipak Gupta, who is currently the joint managing director of the bank, is said to be appointed as the bank’s managing director and chief executive officer until December 31, 2023, subject to the RBI’s approval. Incidentally, Gupta’s tenure at the bank will also end on December 31, 2023, in line with Kotak’s tenure.
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READ: Man who invested Rs 10,000 in Kotak Mahindra in 1985 is worth around Rs 300 crore today: Uday Kotak
According to reliable sources, the bank has selected three candidates as part of its succession planning and has notified the RBI ahead of the scheduled deadline of August 31, 2023. Normally, RBI takes 3 to 4 months to resume the appointment of MD and CEO. According to market expectations, KVS Manian, president of corporate, institutional and investment banking, and Shanti Ekambaram, president of consumer banking, are said to be the preferred internal candidates to succeed Kotak as the bank’s managing director and CEO.
Members of the banking community said they were “surprised” by Kotak’s decision to resign just four months into his term. “None of us saw it coming,” said the chief executive of a private bank.
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While the exact reasons and timing of Kotak’s early exit are unclear, in a letter to the bank’s chairman, Kotak said he would be busy with some personal and family matters. “My oldest son’s wedding is being planned. So, given these events are nearing the end of my tenure, I think it’s appropriate to pass the baton and stagger the transition.”
Interestingly, Kotak Mahindra Bank is believed to be one of the bidders for IDBI Bank. Friday night, the Department of Investment and Public Asset Management (DIPAM).
persistent association
While Uday Kotak will no longer be managing director and chief executive officer, he will continue to be associated with the bank starting immediately as a non-executive director. In April, the board approved his appointment as a non-independent non-executive director after his term ends in December, with the approval of a “majority majority of the bank’s shareholders,” according to Kotak’s letter. Uday Kotak holds a 25.72% stake in Kotak Mahindra Bank in his personal capacity, making him the bank’s single largest shareholder. According to the latest stock exchange filing, the promoters hold 25.93% of the shares together with family members and associated entities.
“As a founder, promoter and significant shareholder of this great institution, I am in a lonely position,” Kotak said of his 38-year history of creating the bank and growing it to its current status. With a balance sheet size of Rs 4.89 billion as on March 31, 2023, Kotak Mahindra Bank is the fourth largest private bank.
