RBI asks Axis Bank to reassess CEO Shikha Sharma’s 4th term, look for successor

Shikha Sharma is the MD and CEO of Axis Bank. Sharma, who is serving her fourth term, has decided to shorten her tenure by more than two years. Sharma’s decision came after the country’s apex bank the Reserve Bank of India (RBI) questioned the bank’s performance and its deteriorating asset quality. Under Sharma’s tenure, Axis Bank – the country’s third largest private lender – reported its gross non-performing assets (NPAs) rising from 0.96 per cent in March 2009 to 5.28 per cent in December 2017. Axis Bank has also been pulled up twice by the central bank for under-reporting bad loans for financial years 2016 and 2017.

Reserve Bank of India (RBI) has asked Axis Bank’s board to reconsider the fourth term accorded to Chief Executive Officer (CEO) Shikha Sharma, The Economic Times reported.

Although Sharma had been given a fourth term last year, the latest development seems to be a sign of precaution taken by the central bank on the back of multiple frauds coming to light at public sector banks (PSBs).

In a letter addressed to Axis Bank Chairman Sanjiv Misra, RBI urged a review of the decision citing the bank’s performance and its deteriorating asset quality, among other reasons. The regulator urged the bank’s board to give Sharma a one-year term and scout for a successor during the period.

Moneycontrol couldn’t independently verify the report.

A bank spokesperson was quoted by the newspaper as saying, “The bank’s board follows a standard process on senior appointments, and forwards its recommendations to the regulator. This process is currently in progress and we are unaware of any final decision on this issue.” The source added that the all communication between the bank and RBI were confidential.