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The Reserve Bank of India has approved the appointment of Vishwavir Ahuja as the Managing Director and CEO of RBL Bank for a one-year period with effect from June 30, 2021.
“The re-appointment is subject to the approval of shareholders at the ensuing Annual General Meeting,” RBL Bank said in a regulatory filing on Friday.
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The Banks Board Bureau (BBB) has recommended the candidature of Shanti Lal Jain for the position of MD & CEO in Indian Bank.
Jain is currently Executive Director in Bank of Baroda.
The Bureau also recommended the candidature of Soma Sankara Prasad, Deputy Managing Director at State Bank of India, as the candidate on the Reserve List for the MD & CEO position in the Chennai-headquartered public sector bank.
The Board of the Bureau interfaced with nine candidates from various public sector banks on May 24, 2021, for the forthcoming vacancy of MD & CEO in Indian Bank, BBB said in a statement.
Padmaja Chunduru, current MD & CEO of Indian Bank, will retire on August 31, 2021.
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Analysts believe that this development is marginally negative for Kotak Mahindra Bank, as Uday Kotak, the promoter MD and CEO, will not be eligible for reappointment once his term gets over.
The Reserve Bank of India’s (RBI) final guidelines on the tenure of bank MD, CEOs, or Whole Time Director (WTD) will apply to private lenders, small finance banks (SFBs), and wholly-owned subsidiaries of foreign banks. Under the new guidelines, the post of MD and CEO of a private bank cannot be held by the same individual for more than 15 years in one go. While, in the case of a promoter MD/CEO, the tenure will be capped at 12 years. RBI has noted that under special circumstances and at the discretion of the apex bank, the term for promoter CEO may be extended up to 15 years. “Banks such as HDFC Bank, ICICI Bank, and IndusInd Bank had a change at the helm in the recent past. However, banks like Kotak Mahindra Bank, DCB Bank, City Union Bank, Federal Bank, and RBL Bank have long-running tenures (+10 yrs) of the current MDs,” said Siji Philip and Dnyanada Vaidya, research analysts, Axis Securities.
For Kotak Mahindra Bank and City Union Bank, the term extension has already been done till 2024 and 2026, respectively. Analysts believe that this development is marginally negative for Kotak Mahindra Bank, as Uday Kotak, the promoter MD and CEO, will not be eligible for reappointment once his term gets over. However, he will continue to remain a stakeholder in the bank. Uday Kotak got reappointed on January 1, 2021, for a period of three years. “Hence, his tenure will now end on 1 Jan 2024 and he is not eligible for reappointment as he has already completed 15 years as the MD and CEO,” said Suresh Ganapathy, analyst at Macquarie Research in a note.
Ganapathy also said that the second in line Dipak Gupta (current Joint MD) may not be eligible to succeed Kotak as the CEO as the 15 year cap applies for all whole-time directors (WTD) on the board. RBI circular also stated that the upper age limit for MD and CEO and WTDs in the private sector banks would continue and no person can continue as MD and CEO or WTD beyond the age of 70 years. Banks are permitted to comply with these instructions latest by October 01, 2021. It should be noted that banks with MD and CEOs or WTDs who have already completed 12 or 15 years as MD and CEO or WTD, on the mentioned date these instructions coming to effect, shall be allowed to complete their current term as already approved by the Reserve Bank.
Kotak Mahindra Bank shares were trading nearly 3 per cent higher at Rs 1,799 apiece on BSE in intraday deals on Wednesday. So far, a total of 46,000 shares have traded on BSE, while a total of 19.40 lakh shares have exchanged hands on NSE. RBI also clarified that the individual will be eligible for re-appointment as MD and CEO or WTD in the same bank, if considered necessary and desirable by the board, after a minimum gap of three years, subject to meeting other conditions. “During this three-year cooling period, the individual shall not be appointed or associated with the bank or its group entities in any capacity, either directly or indirectly,” RBI said.
According to Ganapathy, the CEOs of HDFC Bank, ICICI Bank and Axis Bank have plenty of time and can be the CEO for more than a decade as they were appointed as the CEO recently. HDFC Bank CEO took charge last year whereas ICICI Bank CEO took charge a couple of years ago. Similarly, Axis CEO also can be the CEO for more than a decade.
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The Economic Offences Wing (EOW) of the Delhi Police has named Sunil Godwani, former MD of financial services firm Religare Enterprises, as the beneficiary of ₹34 crore in the corporate loan-book fraud, in its supplementary charge-sheet, sources told BusinessLine.
The total outstanding in the corporate loan book as on December 2020 is ₹2,967 crore. Godwani is also a co-accused in the loan scam involving Laxmi Vilas Bank, where Religare deposited nearly ₹900 crore with the bank, which was used by the bank to further lend to entities linked to Shivinder and Malvinder Singh, erstwhile promoters of Religare Group.
Malvinder, Shivinder, Godhwani, Kavi Arora and Anil Saxena were arrested in the case by the EoW Economic Offences Wing (EOW) of Delhi Police in 2019, for allegedly diverting RFL’s money and investing in other companies. An FIR was registered in March 2019, after the police received a complaint from RFL’s Manpreet Suri against Malvinder, Shivinder and others, alleging that loans were taken by them while managing the firm but the money was invested in other companies.
The ED too has lodged a money-laundering case based on this. The Serious Fraud Office, after investigation, had issued an alert against Godwani leaving for overseas. In 2019, Godwani was arrested at the Delhi airport before he could leave for London. Godhwani was released on interim bail for three weeks on September 25, 2020 by the Sessions Court in Delhi.
The interim bail was extended for 10 days to October 15, 2020. Godwani was supposed to surrender on October 26 but did not do so, sources involved in the matter said. In its order dated December 4, 2020, the Sessions Court directed Godwani to surrender within two days, adn this was challenged by Godwani and the arrest was stayed by the High Court vide order dated December 5, 2020.
An FIR was registered with EOW and a criminal complaint was filed on December 19, 2018 into the matter. Godwani could not be reached on his mobile phone.
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Rao’s appointment in the Central Bank of India will be effective from the date of assumption of office on or after March 1, 2021, or until further orders, whichever is earlier, said the lender.
“He ceases to be the Executive Director of Canara Bank with effect from March 1, 2021,” Canara Bank said.
In May last year, the Banks Board Bureau had recommended Rao to be the new MD & CEO of Central Bank of India.
Rao’s appointment is in lieu of M D Pallav Mohapatra, who retired as the MD & CEO of Central Bank of India on February 28, 2021.
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