Kotak Mahindra Bank’s new CEO to give tech push, but has tall task ahead: Experts

Ashok Vaswani

The appointment of Ashok Vaswani as the new Managing Director and Chief Executive Officer of Kotak Mahindra Bank is likely to be beneficial in the long run as the bank aims to achieve technological advancement to provide superior customer services, experts said.

They added that the new MD and CEO will have the big task of managing senior management attrition/business dislocation, if any. “We believe the new MD and CEO has a tall task on his hands to manage senior management attrition/business dislocation, if any, typically seen post top-management changes in banks,” said Emkay Research in a report on October 23.

According to the Religare Broking report, the appointment is a positive update for the bank as it will reduce the uncertainty regarding the top management of the bank.

On October 21, Kotak Mahindra Bank, in an exchange filing said that the Reserve Bank of India (RBI) approved the appointment of Ashok Vaswani as the MD and CEO of the Bank under Section 35B of the Banking Regulation Act, 2013.

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The new MD and CEO will take charge with effect from a date not later than January 1, 2024, as per the BSE exchange filing by the private lender.

Experts believe that it will help technological advancement of the bank because Vaswani brings in experience from consumer banking and specialises in leveraging technology for the company.

Vaswani has a three-and-a-half-decade experience with the CitiGroup, and more recently with Barclays.

Uday Kotak, founder of the bank, tweeted, “I am delighted that the RBI has approved our recommendation, Ashok Vaswani, as the next CEO of Kotak Mahindra Bank. 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 and India of tomorrow.”

“He brings with him significant executional experience with a high degree of compliance and industrial strength across corporate and consumer businesses,” the Kotak Bank exchange filing said.

At Barclays Bank, UK, Vaswani was associated as the Chief Executive Officer of their Global Consumer, Private, Corporate and Payments business and was a member of the group executive committee.

Prior to that, Vaswani was CEO, Citigroup Asia Pacific and a member of the Citigroup Global Operating & Management Committees.

Emkay Research report further said that it is unclear if Vaswani was the bank’s preferred recommendation or if his appointment was an unanticipated RBI decision.

This is because it was earlier expected that this position would be taken over by a top official internally.  At the time, Kotak Mahindra Bank had shortlisted two names as possible successors to Kotak’s successor.

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“We have sent two names for the MD and CEO role to RBI in order of priority," Uday Kotak had told CNBC-TV18 on September 3, without disclosing if they were internal candidates or not.

Internally, the top candidates believed to be in the race for the post of MD and CEO included interim CEO Dipak Gupta, Shanti Ekambaram, President, Consumer Banking, and K V S Manian, President, Corporate, Institutional and Investment Banking.

“However, there is some spot of relief for investors, as the RBI has not yet raised any objection to Uday Kotak’s non-executive, non-independent board seat,” Emkay said in a research note.