Home / Opinion / For Indian banking sector, let a hundred CEOs bloom

On 12 June, the shareholders of Yes Bank Ltd at its annual general meeting passed a resolution with “overwhelming majority" reappointing its managing director and chief executive officer (CEO) Rana Kapoor, 60, for three years. Kapoor’s current term ends in August.

Two other private banks larger than Yes Bank will get new CEOs between now and April 2019: ICICI Bank Ltd and Axis Bank Ltd.

And, two more, HDFC Bank Ltd and IndusInd Bank Ltd, will have new leaders in 2020.

Romesh Sobti’s tenure at IndusInd Bank will end in March 2020 and Aditya Puri, who has been at the helm of HDFC Bank since September 1994—probably the longest-serving CEO of any bank of this size globally—will hang up his boots in October 2020.

Since 1994, when the first set of 10 new private banks got the licence to set up shop, we haven’t seen so many top positions up for grabs.

ICICI Bank CEO Chanda Kochhar’s current term ends in March 2019, but mired in controversy, she has gone on leave till an independent probe into her alleged misconduct is complete.

Sandeep Bakhshi, managing director and CEO of group company ICICI Prudential Life Insurance Company Ltd, has been appointed ICICI Bank’s chief operating officer for five years. Bakhshi may formally succeed Kochhar when she steps down.

Axis Bank’s Shikha Sharma is around till the year-end, while the hunt is on for her successor. None of the senior executives of the bank is expected to make it to the corner room. IndusInd, too, doesn’t have too many senior bankers who could compete among themselves to be in Sobti’s shoes.

HDFC Bank, in contrast, has a strong bench, led by its deputy managing director, Paresh Sukthankar. Puri has not mentored anyone to succeed him automatically as he feels that’s not in sync with corporate governance. Of course, he will have his input on the selection of the next CEO, but it is up the board to choose his successor.

In 1994, the new set of private banks dipped into the talent pool of the State Bank of India (SBI) and many foreign banks for leaders.

This time around, the headhunters have been working overtime, investors are anxious and many senior professionals in the banking and non-banking space in India and overseas are waiting to be wooed.

The basic difference between then and now is, in the 1990s, the hunt was for leaders who could create banks; now the managements are looking for bankers who can maintain the momentum for a few of them and rebuild others.

The government-owned banks have bigger challenges. On 17 June, the Banks Board Bureau (BBB), a screening body for top positions in public sector banks (PSBs), recommended 22 general managers for the post of executive directors but what’s happening to fill in the posts of managing director and CEO?

CEOs of Andhra Bank, Dena Bank and Punjab & Sind Bank retired on 31 December. CEOs of Central Bank of India and Canara Bank will step down soon. They will be followed by the chiefs of Bank of Baroda, Syndicate Bank, Indian Bank, Uco Bank, United Bank of India and Corporation Bank.

To complicate matters, Allahabad Bank CEO Usha Ananthasubramanian has been divested of all powers by the bank’s board, following a directive from the finance ministry.

And, last week, the Economic Offences Wing of the Pune Police arrested Ravindra Marathe, CEO of Bank of Maharashtra (and his predecessor Sushil Muhnot) for alleged involvement in a fraud.

IDBI Bank, too, turned headless last week following its boss M.K. Jain moving to RBI as a deputy governor (this position was vacant since August 2017).

SBI managing director B. Sriram is being given additional charge for looking after the bank for three months, presumably to oversee the stake sale, which seems imminent.

At least one and a half dozen EDs and over a dozen CEOs need to be appointed during this fiscal for different reasons, including retirement. Eight of the 11 banks that have been under RBI’s so-called prompt corrective action, which restrains their activities and, of course, growth, feature on the list.

Where will the CEOs come from? Does the public sector banking industry have enough talent to fill in the positions? Will the BBB look into SBI senior managers? Will it hunt for talent in the market? How will some of the CEOs look at their assignments: reviving them or putting them to sleep?

One thing is for sure: Despite the fast-deteriorating health of PSBs, which roughly have 70% share in banking assets, appointment of CEOs—in time and with the right profile—and spotting and nurturing talent have seldom been a priority for their majority owner. That’s the biggest bane of the banking system.

Tamal Bandyopadhyay, consulting editor at Mint, is adviser to Bandhan Bank.

His Twitter handle is @tamalbandyo.

Comments are welcome at

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Edit Profile
Get alerts on WhatsApp
My ReadsRedeem a Gift CardLogout