Mumbai: At least six Indian banks will have new chief executives (CEOs) in the next few months. Some of them have already been identified, while the search is on for others. The change of guard at some of India’s best-known banks comes at a time when the industry is gearing up for lower loan growth, more bad loans and rising government bond yields. Together, these factors are bound to hurt the profitability of banks.
The country’s largest private sector lender, ICICI Bank Ltd, will see a change of guard in May when K.V. Kamath, managing director and CEO since 1996, steps down to make way for Chanda Kochhar, currently joint managing director and chief financial officer.
In good hands: Chanda Kochhar (right) is set to replace K.V. Kamath as CEO and managing director of ICICI Bank Ltd in May. Abhijit Bhatlekar / Mint
Kamath will become the bank’s chairman, replacing N. Vaghul. ICICI Bank is expected to announce several changes in its top management as well as that of its affiliates when its board meets on 25 April to announce earnings for the quarter ended 31 March.
Axis Bank Ltd, the country’s third largest private sector lender, will also get a new boss in July, but it has not yet zeroed in on the right candidate. Unlike ICICI Bank that named Kochhar as CEO-designate five months ahead of Kamath’s retirement, Axis Bank is still scanning a list of candidates to identify a succcessor for P.J. Nayak.
Shikha Sharma, managing director and CEO of ICICI Prudential Life Insurance Co. Ltd, is a contender for the post. As is Hemant Kaul, an Axis Bank insider, who has been heading its retail operations. The bank’s board may discuss the issue on 20 April, when it meets to take into account the fourth quarter earnings.
Nayak is chairman and managing director of the bank, but after he hangs up his boots the post will be split. And unlike Kamath, Nayak may not continue with the bank as its non-executive chairman.
One of the names being discussed for the chairman’s post is that of K.N. Prithviraj, administrator of the Specified Undertaking of the Unit Trust of India, the main promoter of the bank. Prithviraj is former chairman and managing director of New Delhi-based public sector lender Oriental Bank of Commerce.
While the current chiefs at ICICI Bank and Axis Bank will step down in May and July, the top posts at Development Credit Bank Ltd (DCB) and ING Vysya Bank Ltd have been vacant for some time.
In the first week of April, ING Vysya’s CEO Vaughn Richtor retired after completing his three-year tenure and a two-month extension, but India’s central bank is yet to approve the appointment of his successor, Gautam Vir, former managing director and CEO of DCB.
A senior official of the Reserve Bank of India (RBI), who did not want to be identified, said the central bank has sought certain clarifications from ING Vysya on the new CEO’s appointment.
There is nothing unusual in this. Even private banks need the regulator’s approval for the appointment of their CEOs. RBI often seeks clarifications on such appointments.
The chiefs of public sector banks are appointed by the government after an appointment committee clears their names. RBI is represented on this committee.
Pending the appointment of a new CEO, current chief financial officer of ING Vysya Jayant Mehrotra has been made officer in charge, who looks after the day-to-day operations in the bank.
To an email query on Vir’s appointment, a spokesperson said: “The process for CEO selection is still under way and it is not appropriate for us to comment right now. We shall revert with details once the process is completed.”
Murali Natrajan, global head of small and medium enterprises banking at Standard Chartered Bank, will head DCB once RBI clears his appointment.
Indeed, the top positions at both ING Vysya and DCB may remain vacant for a few weeks, but that’s not a long time, particularly when considering how much time the central bank is taking to fill the post of a deputy governor.
V. Leeladhar, who was handling the most critical portfolio of banking operations and developments as deputy governor, retired in December, but RBI has not yet been able to appoint his successor.
Punjab National Bank’s (PNB) chairman and managing director K.C. Chakrabarty is front-runner for the post. The other contender is Bank of India chief T. S. Narayanasami.
If Chakrabarty moves to RBI, then the top post at PNB will fall vacant. Alok Kumar Misra, chairman and managing director of Oriental Bank of Commerce, may move there.
The top post at Bank of India will also become vacant in June irrespective of whether Narayanasami moves to RBI or not. This is because he is set to retire in May.
Several senior bankers are eyeing the top post that he will vacate.