Uday Kotak, the founder and promoter of Kotak Mahindra Bank, has resigned from the post of managing director and chief executive officer of the bank, effective from September 1, 2023. He has been the MD and CEO of the bank since August 2002, and has led the bank’s growth and transformation from a non-banking finance company to a full-fledged private sector bank. Uday Kotak is one of the richest bankers in India, with a net worth of $16.4 billion, according to Forbes.
In a letter to the shareholders, Uday Kotak said that he has decided to step down from his executive role to focus on his other responsibilities as the non-executive chairman of the bank and the president of the Confederation of Indian Industry (CII). He also said that he will continue to be involved in the strategic direction and vision of the bank, and will mentor and guide the new leadership team.
Dipak Gupta appointed as interim MD and CEO
The board of directors of Kotak Mahindra Bank has appointed Dipak Gupta, the joint managing director of the bank, as the interim MD and CEO for a period of two months, starting from September 2, 2023. Dipak Gupta has been with the bank since 2004, and has been instrumental in building the bank’s retail banking, digital banking, wealth management, and international business segments. He is also a member of the bank’s executive board and risk management committee.
The appointment of Dipak Gupta is subject to the approval of the Reserve Bank of India (RBI) and the shareholders of the bank. The bank said that it has submitted an application to the RBI for its approval, and will seek the consent of the shareholders through a postal ballot.
RBI approves Dipak Gupta for two months instead of four
The RBI has approved the appointment of Dipak Gupta as the interim MD and CEO of Kotak Mahindra Bank for a period of two months instead of four, as requested by the bank. The RBI has also indicated its intent to appoint a full-time chief for the bank soon.
The RBI’s approval comes after it had earlier rejected the bank’s proposal to extend Uday Kotak’s tenure as MD and CEO for another three years, citing its norms on leadership succession and corporate governance. The RBI had asked the bank to find a suitable successor for Uday Kotak by December 31, 2022.
Kotak Mahindra Bank awaits RBI approval on proposed CEO succession
Kotak Mahindra Bank is currently awaiting RBI approval on its proposed CEO succession plan, which it had submitted to the regulator in June 2023. The bank had proposed to elevate Prakash Apte, an independent director on its board, as its vice-chairman and managing director, and Shanti Ekambaram, its president for consumer banking, as its joint managing director.
The bank had also proposed to appoint Uday Kotak’s son Jay Kotak, who is currently an executive director on its board, as its deputy managing director. The bank had said that these appointments are in line with its long-term vision and strategy, and will ensure continuity and stability in its leadership.
Kotak Mahindra Bank’s performance and outlook
Kotak Mahindra Bank is one of the leading private sector banks in India, with a market capitalization of over Rs 4 lakh crore. The bank has a diversified portfolio of products and services, catering to various segments of customers across retail, corporate, SMEs, agriculture, and NRI segments. The bank has a network of over 1,600 branches and 2,600 ATMs across India.
The bank reported a net profit of Rs 2,589 crore for the quarter ended June 30, 2023, up by 32% year-on-year. The bank’s net interest income grew by 6% to Rs 4,147 crore, while its net interest margin stood at 4.6%. The bank’s asset quality improved, with its gross non-performing assets ratio declining to 2.46% from 3.58% a year ago. The bank’s capital adequacy ratio was at 23.7%, well above the regulatory requirement.
The bank expects to maintain its growth momentum in the coming quarters, driven by its strong retail franchise, digital capabilities, prudent risk management, and robust capital position. The bank also aims to leverage its synergies with its subsidiaries and associates in various businesses such as insurance, asset management, securities, investment banking, and fintech.
