No RBI communication yet on CEO succession: Kotak Mahindra Bank

Mumbai: Kotak Mahindra Bank (KMB), India’s third-largest private lender by market value, has denied that the banking regulator has suggested it hire an external candidate to succeed founder-CEO and richest Asian banker Uday Kotak, who is set to give up executive responsibilities at the end of this year.

The ₹3.7-lakh-crore bank, among the four large lenders that make up India’s top fifteen companies by market capitalisation, also denied a report that the RBI had directed it to reduce its stake in insurance ventures.

“We would like to state that there is no communication, formal or informal, from the RBI to Kotak Mahindra Bank or its board members on CEO succession,” said a spokesperson at the bank. “Further, the bank holds all regulatory approvals including from RBI for its stake in its insurance subsidiaries and has not received any formal or informal communication to the contrary.”

The bank’s statement was in response to a Bloomberg report that said the central bank is nudging Mumbai-based Kotak Mahindra Bank to select someone outside the lender’s ranks to lead the bank after its founder gives up an executive responsibility at the end of the mandated tenure.

The regulator is also reviewing whether stakes the banking group holds in two wholly-owned insurance units pose any risks to the firm’s stability, the report quoted unnamed people as saying. Uday Kotak’s tenure as CEO of the bank will come to an end on December 31. He has led the bank since its inception after converting the NBFC he founded in 1985 into a full-fledged commercial bank in 2003.