Yes Bank's board initiates search for new chief executive

Incumbent Prashant Kumar may also get a one-year extension

Yes Bank's board of directors are said to have initiated a formal search for a new chief executive officer for the lender, sources aware of the matter said. The board has engaged global recruitment firm Egon Zehnder to run the process, the sources said.

“This is a rather recent development at the bank,” a highly placed source, who did not want to be identified, told Moneycontrol.

In response to an email seeking its response, bank's official spokesperson said, “As a regulated financial institution, the bank follows a well-defined process for the appointment or reappointment of key managerial personnel, including managing director & chief executive officer. We are currently adhering to all required procedures and regulatory guidelines. Any developments in this regard will be appropriately communicated, as and when necessary.”

However, the source cited above, added that there is a fair possibility that Prashant Kumar, the bank’s incumbent MD & CEO may be offered an extension for at least a year, if the search process does not yield the desired result. “Kumar has shouldered the job of bringing stability into the bank and that’s a huge factor in his favour”.

To put things in context, Kumar’s three year tenure as Yes Bank’s chief is set to end in October this year. The bank’s board is yet to formally decide whether Kumar should be recommended for another term as the bank’s chief executive. The regulator typically takes about 90 days to approve such leadership level appointments.

Boards normally take a call on CEO appointments at least six months prior to the conclusion of the incumbent’s tenure. There is barely five months remaining of Kumar’s tenure.

The sources cited say with the bank readying for the next phase under a new promoter soon, the board is keen to rope a retail specialist from a private bank.

Recently Moneycontrol had reported that after picking a 20 percent stake in Yes Bank, Japan’s financial behemoth, SMBC is set to approach the Reserve Bank of India with its proposal to take 51 percent ownership control in the bank.

“SMBC wants to start operations at Yes Bank by the start of FY26,” said a senior banker with knowledge of the matter. The hunt for a new CEO may also be viewed as a change that the likely new promoters of the bank may want.