Uday Kotak, the founder of Kotak Mahindra Bank, which he led for nearly two decades, announced that he was stepping down as its MD and CEO four months before the end of his term. The banker’s decision to become a non-executive director came as a surprise. The bank has recommended two candidates for CEO position to RBI and until the regulator approves the name, the board has appointed joint MD Dipak Gupta as interim MD & CEO. Kotak said that the intent of stepping down early was to get more time for his son’s marriage coupled with the need to sequence exits of the MD, joint MD and chairman who will complete their terms at the end of the year.
The exit of the top management was triggered by a change in RBI rules in 2021 that capped the maximum term for bank CEOs at 15 years and whole time directors at 10 years. In the past, changes in shareholding norms and regulations had enabled Kotak to hold over 25% in the bank. Many in banking speculated that Kotak might stay on as CEO beyond 2023 but the central bank appears to have taken a firm stand.