Uday Kotak, the founder, promoter, and significant shareholder of Kotak Mahindra Bank, has tendered his resignation as the Managing Director (MD) and Chief Executive Officer (CEO) with immediate effect. This decision was communicated through a stock exchange filing.
A Lone Decision
In a letter addressed to the bank’s board, Kotak expressed his unique position within the institution. He mentioned, “I stand in a lonely place of being a founder, promoter, and significant shareholder of this great institution. In these changing times, I envision an India leading the world in the years ahead.”
The Right Move
Kotak, who has led the bank since its inception, shared that he had contemplated this decision for some time and believes it is in the best interest of the institution. His tenure at Kotak Mahindra Bank began when he transformed the NBFC he founded in 1985 into a full-fledged commercial bank in 2003.
During the interim period, Dipak Gupta, the Joint MD of the bank, will take over the responsibilities of Uday Kotak. This transition is set to continue until December 31, subject to approval from the Reserve Bank of India (RBI) and the bank’s members.
It’s worth noting that India has recently implemented stricter rules regarding the tenure of bank CEOs. The maximum tenure allowed for bank CEOs is now 15 years. Additionally, outgoing heads are required to observe a three-year cooling-off period and are not allowed to be associated with the bank or its group entities during this time.
Denying External Leadership
Kotak Mahindra Bank denied recent reports that the RBI had suggested hiring an external candidate to succeed Uday Kotak as CEO. The bank refuted claims that the central bank was nudging them towards selecting an external candidate. Uday Kotak is set to give up executive responsibilities at the end of this year.
Uday Kotak’s net worth is estimated to be approximately $14.5 billion, primarily derived from his 26% stake in Kotak Mahindra Bank, making him one of Asia’s wealthiest bankers.