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The board of Equitas Small Finance Bank will seek Reserve Bank of India’s permission to extend the term of its Managing Director and CEO PN Vasudevan by a year instead of the earlier proposal for three years.
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The MD & CEO’s exit sparks questions, around the bank’s future coming as it does amidst corporate changes such as the reverse merger with the holding company and Equitas’ universal bank aspirationsThis follows Vasudevan’s recent decision to step down from the post to focus on a charitable trust set up by him and his wife.
“My tenure as MD and CEO comes to an end on July 23. The board had approved a three-year extension and had applied to the RBI for the same. Now, with the latest developments, the board will be asking for one year extension,” Vasudevan told BusinessLine.
If the process for finding a successor is not completed by then, the board could ask for another extension, he added.
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He, however, stressed that he would continue to helm affairs at the bank until a replacement is found.
Timeline
“There really is no timeline for my stepping down, but normally one year is a decent timeline”, he said, adding that it could get completed within a year to 15-month timeline.
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Equitas SFB Managing Director & CEO Vasudevan to step down
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“We’ll be forming a search company and it will get into the entire process,” Vasudevan said when asked whether the bank would look at internal or external candidates.
“We haven’t really started that dialogue internally,” he said.
Vasudevan’s announcement on May 19 to step down had surprised analysts and investors. The bank’s scrip has fallen since then and touched a 52-week low of ₹40.30 apiece on BSE on Tuesday.
Taking on the criticism that his decision came as a surprise, Vasudevan questioned how it could have been done in a better way.
“I am very keen to find out the other ways so that there could be no surprise or no shock element. Even today, I don’t know what else could have been done,” he contended.
Pointing out that the bank is a listed entity, he said, the moment he informed the board of his intent to step down, irrespective of the timeline, it had to be disclosed to the exchanges.
“It is price sensitive information. It can’t be held back by the board,” he stressed.
He noted that the situation is unique as he has decided to step down voluntarily.
“If you look at the private sector banks for the last few years, the only time the MD and CEO of a bank left is either because they had completed 70 years of age or there was an issue,” he said.
He further stressed that the bank is in a good position with strong growth plans and that is why he decided to take the plunge at this point of time.
“A change at the top should not have any impact on the bank,” he said, adding that the merger of Equitas Holdings with Equitas SFB will not be impacted.
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