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Private sector lender Axis Bank, on Tuesday, said it has shortlisted three candidates to possibly succeed its Managing Director and CEO Shikha Sharma who retires at the end of this year.

“In terms of extant Reserve Bank of India norms and the Succession Planning Process of the bank, the board of directors of the bank, at its meeting held on July 9, has recommended the names of three candidates in order of preference for the approval of the RBI,” it said in a regulatory filing to the bourses.

The candidate approved by the RBI will succeed Sharma, whose term expires on December 31, 2018, it added.

Though the lender did not mention the names of the three candidates, sources said that Bank of Baroda MD and CEO PS Jayakumar is seen as the top contender for the post. He has previously worked with CitiBank and was the co-founder and CEO of VBHC Value Budget Housing as well as the co-founder and Non-Executive Promoter Director of Home First Finance Company. Sources said another shortlisted candidate is an external replacement, while the third candidate is likely to be from within Axis Bank.

A decision is expected by next month, giving the successor adequate time for a smooth transition.

Earlier this year, on April 20, the bank had announced that it had appointed global leadership advisory firm Egon Zehnder to recommend a successor to Sharma.

Prior to that on April 9, it had announced that Sharma had decided to cut short her fourth term and leave at the end of the year.

With the lender facing high non-performing assets, the RBI is understood to have asked why she was being given a fourth term.

For the quarter ended March 31, 2018, Axis Bank had posted its first-ever quarterly loss at ₹2,188 crore, with a threefold increase in its provisions for bad loans.

It is expected to announce its first quarter 2018-19 results later this month.

The Axis Bank scrip gained 1.7 per cent to close at ₹532.55 apiece on the BSE.

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