The Hindu Business Line : P.J. Nayak back at UTI Bank helm

In a strategic move to get round the RBI directive to split the chairman and managing director's post, the UTI Bank board on Monday appointed Dr Nayak as Chairman with none designated as managing director.

"The bank's board has recommended to shareholders that Dr P.J. Nayak be appointed as whole-time Chairman, subject to approval of the Reserve Bank of India, the Specified Undertaking of the Unit Trust of India and shareholders, effective August 1," said a BSE announcement. "This requires shareholders to approve amendments to the bank's Articles of Association," said the notification.

The bank has not yet decided on its managing director. "The bank does not have any managing director for the time being," said a senior member of the board.

RBI had earlier turned down the re-appointment of Dr P.J. Nayak as Chairman and Managing Director, UTI Bank. Dr Nayak's term expires on July 31. The central bank has proposed a split in the office of chairman and managing director in line with the recommendations of the Dr Ganguly Group Report on Corporate Governance. The RBI has sought a revised proposal from the bank on whether Dr Nayak should be reappointed either as Chairman or as Managing Director.

However, Dr Nayak had informed the RBI and the Remuneration and Nomination Committee of the board of the bank that it would not be possible for him to function in a "different and lesser capacity" and, therefore, cease to be associated with the bank after the expiry of his term.

According to the BSE notification, the decision to the name change follows the existence of several shareholder-unrelated entities using the UTI brand, and the consequent brand confusion.

"The board of directors of the bank has decided to recommend to shareholders an amendment to the bank's Memorandum and Articles of Association to change the name of the Bank from UTI Bank Ltd to Axis Bank Ltd, subject to the approval by the Union Government (Registrar of Companies) and Reserve Bank of India," said a BSE notification.

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