Billionaire banker Uday Kotak steps down as CEO
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Billionaire banker Uday Kotak steps down as CEO
(Reuters) - Billionaire Uday Kotak, who founded and leads Kotak Mahindra Bank (KTKM.NS), has resigned as the managing director and chief executive four months before his term was set to end, the bank said in a stock exchange filing on Saturday.
Kotak Mahindra Bank is India's fourth largest private sector bank by assets.
Dipak Gupta, currently the joint managing director, will carry out the chief executive duties until Dec. 31, the bank added.
"I have mulled over this decision for some time and believe it is the right thing for the institution," Kotak wrote in a letter sent to India's exchanges.
"I thought it appropriate to hand over the baton and stagger the transition," Kotak wrote.
India's banking regulation limits the tenure of lenders' chief executives to 12 years if they are also large shareholders.
Kotak's term was due to end in December.
The bank has already made an application for the new managing director to India's central bank, the bank said in its exchange notification. In India top posts at lenders are approved by the Reserve Bank of India, which regulates banks.
"If the new chief executive is from outside the bank, the transition would require a lot of hand-holding," said Amit Tandon, chief executive of proxy advisory firm Institutional Investor Advisory Services.
"However if the bank has chosen an internal candidate then the transition could be much more smoother," Tandon said.
On social media platform X, formerly known as Twitter, Kotak said "Founders go away, but the institution flourishes into perpetuity".
He said he would remain on the bank's board as a non-executive director and significant shareholder.
Anand Dama, a banking analyst with brokerage firm Emkay Global Financial Services, said that while the CEO's early departure was a surprise, the application for his replacement's approval suggested the bank already had an internal candidate.
