Leadership upheavals at major banks might mean opportunity, but incoming new bosses have their work cut out for them
The RBI has capped Yes Bank founder Rana Kapoor’s tenure till January
Image: Kunal Patil / Hindustan Times via Getty Images
Banks in India might never be in for a more challenging, or should one say, exciting phase. In the next two years, some of the biggest new private sector banks in India—ICICI Bank, Axis Bank, Yes Bank, IndusInd Bank and HDFC Bank—will have new leaders.
The exits of the leaders of three banks—Chanda Kochhar, former managing director and CEO of ICICI Bank, Shikha Sharma, CEO of Axis Bank, and Yes Bank’s MD and CEO Rana Kapoor—are against their wishes. Kochhar, 56, was in exile since June 1 until an internal inquiry submitted a report on allegations of quid pro quo against her and her family for loans given by the bank to Videocon Industries in 2012. She sought early retirement, which the bank’s board approved this month. Sandeep Bakhshi, an ICICI group veteran of 32 years, who took over as chief operating officer in July, has taken charge.
Axis’s Sharma and Yes Bank’s Kapoor are set to leave their respective posts in the first month of 2019 as well. Their exits are linked to the Reserve bank of India’s scrutiny on corporate governance risks, after huge divergences were noticed in the reporting of non-performing assets in the past two years.
Two other veteran bankers, Romesh Sobti, managing director and CEO of IndusInd, and Aditya Puri, managing director of HDFC, are set to serve out their terms by March 2020 and October 2020, respectively. Puri is possibly the longest serving head of any banking institution in India—he will have completed 26 years after taking charge in September 1994.
This means that a whole set of leaders will come to the fore in banking, possibly for the first time in over 25 years when the RBI paved the way for the entry of new private banks by issuing licences to four of them—ICICI, HDFC, Axis and IndusInd—between 1990 and 1994.
The effect of the transition will be most critical for and deeply felt by Yes Bank. The RBI, on September 20, granted Kapoor—who along with his brother-in-law late Ashok Kapur founded the bank in 2004—time to continue only till January 31, 2019, as against the bank board’s approved term of three years that would have ended in September 2021.
“ There is a serious NPA challenge ahead of us even though every single quarters CEOs trot out the that ‘the worst is behind us.’
Saurabh Mukherjea, founder, Marcellus investment
(This story appears in the 26 October, 2018 issue of Forbes India. To visit our Archives, click here.)