Uday Kotak, MD and CEO of Kotak Mahindra Bank, will be taking on a non-executive role on the board of the private sector lender, following the end of his term as the head of the bank at the end of 2023.
As per remote e-voting which ended on April 20, about 99 per cent of the 10,026 voting shareholders of the bank voted in favour of appointing Kotak as a non-executive, non-independent director on the board.
Kotak is required to step down as the MD and CEO of the bank as per Reserve Bank of India’s 2021 guidelines that capped the tenure of heads and whole-time directors of private banks at 15 years from the date of appointment.
The RBI had said while for CEOs, who are part of the promoter group or large shareholder, the tenure will be capped to 12 years, but will be extendable by 3 years subject to certain conditions.
Cooling period
Kotak’s appointment as the non-executive director is not likely to be effective immediately as the RBI norms require a three-year cooling period before an individual can be eligible for re-appointment as MD and CEO or whole-time director in the same bank.
“During this three-year cooling period, the individual shall not be appointed or associated with the bank or its group entities in any capacity, either directly or indirectly,” the central bank had then said.
Kotak, who was reappointed as the MD and CEO of Kotak Bank for three years in January 2021, is set to complete 15 years on December 31, 2023. He has been heading the bank since its inception as an NBFC in 1985, and later as a commercial bank 2003 onwards.
Joint MD Dipak Gupta is also not likely to be eligible to replace him as he will complete 15 years as whole-time director of the bank in 2024. The bank has reportedly hired consulting firm Egon Zehnder to lead a global search for a CEO to succeed Kotak, for which Group presidents and whole-time directors Shanti Ekambaram and KVS Manian are the internal candidates.