RBI Approves Ashok Vaswani's Appointment As Kotak Mahindra Bank's CEO & MD

In a surprising development, Kotak Mahindra Bank on Saturday announced that Ashok Vaswani, an outsider, will succeed its founder Uday Kotak as the chief executive officer and managing director of the private sector lender.

Vaswani is presently the president of Pagaya Technologies, a US-Israel fintech firm, and has had a long career with global banks, including Citigroup and Barclays.

In a statement, the bank said the Reserve Bank of India has approved the appointment of Vaswani for a period of three years.

Speculations were rife that an internal candidate was being chosen to succeed Kotak. As per norms, a lender has to send three names in order of preference and the list may include an external candidate as well.

To a specific question on whether Vaswani was the top choice for the job, Kotak Mahindra Bank's interim chief executive officer and managing director Dipak Gupta said that Vaswani's name was recommended by the board and the RBI has approved it.

As per reports, bank veterans K V S Manian and Shanti Ekambaram were the front runners among the internal candidates to succeed Kotak, who is continuing as a non-executive director at the private sector lender.

When asked if the bank is fearing attrition in top management because of an outsider taking over, Gupta said attrition is not the issue but the aspect which the board looked at was the expertise which Vaswani brings with him at a time when banking is undergoing a change.

Both Manian and Ekambaram continue to be at the bank and are also a part of its board, Gupta added.

"Ashok is a world-class leader and banker with digital and customer focus. I am proud that we bring a 'Global Indian' home to build Kotak," Uday Kotak said in a statement.

Gupta termed this as a 'ghar wapsi' to India for Vaswani, who got his commerce degree in a Mumbai college.

He said the appointment is in sync with moves over the last one-and-half-year, where the bank has focused on tapping into the expertise of people of Indian origin working in global companies and getting them to work for it.

These include roles in different aspects such as customer experience, digital and technology to build what it calls the 'bank of tomorrow'.

"I thank the board for entrusting me with the responsibility of leading Kotak Mahindra Bank's journey to the next phase of growth. I am excited and honoured to carry forward the legacy of Uday who has built this world-class institution," Vaswani said.

Vaswani was CEO of Barclays Bank, UK and subsequently CEO of their global consumer, private, corporate and payments businesses and also a member of its group executive committee.

Earlier, he served as the CEO of Citigroup Asia Pacific and a member of the Citigroup global operating and management committees.

Like Uday Kotak, he is also an alumnus of the city's Sydenham College of Commerce and Economics. Vaswani is also a qualified chartered accountant and company secretary.

Kotak was set to retire from his executive role in December. However, it was cut short four months ahead of schedule.

His early exit from the country's fourth-largest bank was cited as a personal reason.

This came as the Reserve Bank of India capped the tenure of a managing director and chief executive officer at 15 years in private sector banks. This is due to the RBI's norms on leadership appointment which was reviewed after the Yes Bank debacle.

Kotak, whose holding in the bank stands at 26 per cent, has become a non-executive director of the bank.