“The board and the bank are fully committed to long term stakeholder value and the bank as an institution will do whatever it takes to ensure that,” Kotak said. “The commitment to long term institution building is at the core of our values and we will do whatever necessary to maintain that.”
The RBI has capped the tenure of bank chief executives at 15 years and 12 years in case of promoter CEOs, a rule that would not make Kotak eligible for another term.
Asia’s richest banker Uday Kotak was reappointed by the central bank for a period of three years starting January 2021. Kotak is the bank’s MD for 17 years.
“His tenure will now end in January 2024 and he is not eligible for reappointment as he has already completed 15 years as the MD and CEO,” Suresh Ganapathy, associate director, Macquarie Capital had said in a note. “Also, in our view, the second in line, Dipak Gupta (current Joint MD), may not be ‘fully eligible’ (assuming three years is the minimum tenure that one would want) to succeed Kotak as the CEO after Jan 1, 2024.”
Kotak also said that succession planning was an ongoing process and the board would act responsibly at the opportune time.
“Any financial institution or company has plans in place if something happens to the senior leader,” he said. “In today’s time the risk of being infected by Covid is even higher, therefore succession planning is a continuous process which each institution thinks about. Our board is fully aware of its responsibility and they will act in a manner that is appropriate.”
