Beena Parmar Moneycontrol News
HDFC Bank will no longer have a deputy managing director (MD) position after the exit announcement of Paresh Sukthankar last week.
“Deputy MD role was created for Paresh Sukthankar valuing his contribution made to the bank…From the Board, there will no more be a deputy managing director… Paresh Sukthankar was a contender (for the CEO position), unfortunately he has resigned,” HDFC Bank’s CEO and MD Aditya Puri told investors in an early morning conference call on Monday.
A natural successor to Puri, his deputy Sukthankar surprised the market on Friday by announcing his resignation after 24 years of service with HDFC Bank. Notably, he was elevated to the deputy MD position in March 2017.
In a bid to assuage the investors, Puri said: “This (resignation) has nothing to do with who will be the successor, these are his personal reasons, he has given his life for the bank, please do not demean it,” he said after questions arose if Sukthankar’s exit was related to him not being considered for the CEO position after Puri retires in 2020.
Sukthankar had direct or supervisory responsibilities for the bank's Credit and Risk Management, Finance and Human Resources functions and for various strategic initiatives of HDFC Bank, which is country's second largest and most-valued bank.
According to Puri, “There are young competent managers, who are here to stay for the next 5 years. The vision and strategy is clear for that period. We have the depth of management, and this will not affect the regular course of business. Of course, it is a loss of a great resource. The board and I will take an appropriate decision in 10-15 days.”
Under its number-two man Sukthankar, with Puri at the helm, HDFC Bank went on to become the most valued lender not just domestically but also globally.
Paresh Sukthankar: The conservative and risk-averse HDFC Bank veteran
“We are well capitalised. We have got processes in place. We have people in place. We have individual business managers running the business. No one individual can take decisions. The bank is not dependent on any individual including myself,” Aditya Puri said in the concall where he took questions from five analysts.
One of the analysts on the call said, “Puri was pretty straightforward. It is the Board and senior management who takes a call, the bank’s franchise is institutionalised so there won’t be a big loss (with Sukthankar’s exit). So, Puri did give a sense of continuity.”
However, the analyst added that we do not know who is number three at the bank?
Another analyst said that now banking is going to be very different with the new Basel III regulations and fintech coming into fray, so could be that they (board) might look for a younger candidate.
“An institution with the size and depth of HDFC Bank is not subject to any one individual and there are enough senior people including executive director Kaizad Bharucha and chief financial officer Sashidhar Jagdishan to take over Sukthankar’s portfolio. “It will be the same even when I leave the board,” Puri said.
He also affirmed that he will be choosing the successor along with four other directors who are in the committee. “Will I have an input? Yes…(but) we have not even started looking (for the successor).”
He further defended, “People underestimate the involvement of our board… If you look at our credit committee minutes, very rarely will you see a statement by me, I’ll be there but whatever I want to say will be there… There is very active discussion, so please do not underestimate the professionalism, the decision.
Moment of truth is when you have touched the customer, vision is long term, strategy is short term, Puri signed off in reply to one of the queries.
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