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The board of Ujjivan Small Finance Bank is scheduled to meet on August 25 to appoint an Officer on Special Duty (OSD) after its Managing Director and CEO Nitin Chugh tendered his resignation.
“The bank is going through a rough time due to the Covid-19 pandemic, just like all other small finance banks and micro finance institutions. Financially, the bank remains very strong and is well capitalised,” said Samit Ghosh, founder, Ujjivan Financial Services. Expressing surprise over Chugh’s decision to resign, Ghosh said that it was for personal reasons.
‘Nothing unusual’
“There is nothing unusual going on with the bank,” he stressed.
However, there have been concerns over provisions and asset quality as well as the spate of resignations at the management level and field offices.
The meeting on August 25 will also induct four new members on the board. The appointment of a new MD and CEO is expected to take about three to four months.
Ujjivan SFB, in a statement, said the transition post Chugh’s resignation is being smoothly managed, in consultation with the Reserve Bank of India.
“The bank has been working for several months to strengthen the board,” it said in a statement.
Noting that the bank has recently witnessed several challenges on the business front, coupled with several resignations both at the board level and senior management, Ujjivan SFB further said: “The immediate task of bank board in close collaboration with the holding company would be to bring back stability and achieve its desired goals and growth, complete the reverse merger and see that shareholders’ interest is duly taken care of.”
Ujjivan SFB’s scrip closed 18.76 per cent down at ₹19.7 apiece on the BSE on Friday.
In a stock exchange filing on August 19, Ujjivan SFB had said Chugh has tendered his resignation as MD and CEO citing personal reasons. He will step down from the role on September 30.
The lender has seen a number of board-level resignations in recent months. Its Chief Financial Officer also tendered her resignation on July 7, which is effective from September 30.
Registers net loss
The bank had reported a standalone net loss of ₹233.48 crore in the quarter ended June 30, 2021, with gross non-performing assets rising to 9.79 per cent of gross advances.
BA Prabhakar, former CMD of Andhra Bank, and Chairman of NSDL, has joined the Ujjivan SFB’s board as an Independent Director and is being considered as Part-Time Chairman of the bank.
The board of Ujjivan Financial Services has nominated Samit Ghosh, the founder of Ujjivan, as a common (non-executive, non-independent) director on the bank board to provide oversight on some critical areas such as portfolio quality and people management.
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