India Kotak Mahindra Bank gets cenbank nod to appoint Ashok Vaswani as MD, CEO

By Siddhi Nayak and Ira Dugal

MUMBAI (Reuters) -India’s central bank has approved the appointment of veteran banker Ashok Vaswani as managing director and chief executive of Kotak Mahindra Bank, the private lender said in an exchange filing on Saturday.

The appointment, subject to shareholders’ approval, is for a period of three years after Vaswani begins his term, which will not be later than Jan. 1, 2024, said the bank, the fourth largest Indian lender by market capitalisation.

Vaswani is an international banker with experience spanning for three and a half decades. He was CEO of Citigroup Asia Pacific, and more recently, CEO of Barclays.

Current regulatory rules mandate that private banks propose at least two candidates with the Reserve Bank of India (RBI) for the post of MD and CEO at least four months before the expiry of the term of office of the present incumbent.

Vaswani’s appointment comes after billionaire Uday Kotak, who founded Kotak Mahindra Bank, resigned as the MD and CEO last month in a surprise move, citing personal reasons.

Kotak’s term was due to end in December. India’s banking regulations limit the tenure of chief executives to 12 years if they are also large shareholders.

Kotak, however, continues to be on the bank’s board as a non-executive director.

Dipak Gupta, currently the managing director and CEO, will carry out the chief executive duties until Dec. 31, the bank had said last month.

“I am delighted that the RBI has approved our recommendation, Ashok Vaswani, as the next CEO of Kotak Mahindra Bank,” Kotak said in the filing, describing him as a “world class leader” with digital and customer focus.

Vaswani’s appointment comes as a surprise because most analysts had expected an insider to succeed Kotak.

At the same time, they had flagged concerns that Kotak’s presence would loom large over his successor if an internal candidate was chosen for the post.

Gupta said he did not expect senior-level attrition at the bank: “The idea was to bring in global talent,” he said on a post-earnings media call on Saturday.

KVS Manian and Shanti Ekambaram, the two most senior bankers at Kotak Mahindra Bank, will remain on the board and keep their current roles, Gupta added.

(Reporting by Siddhi Nayak and Ira Dugal; Editing by William Mallard and Clelia Oziel)