Uday Kotak, in an exclusive interaction with CNBC-TV18 soon after announcing his decision to step down as Kotak Mahindra Bank MD and CEO, said the lender has sent two names to the Reserve Bank of India (RBI) to take over as his successor.

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“We have sent two names for the MD and CEO role to RBI in order of priority," he told CNBC-TV18, without disclosing if both the names were of internal candidates or a mix.

He added the bank has done all it needed to at its end in succession. RBI’s approvals needed. "I believe this is the best sequence to ensure a smooth transition, quell any uncertainty,” he said.

Kotak will now hold the post of the non-executive director at the bank His term as non-executive director of the bank would be for a period of five years, not liable to retire by rotation.

As an interim arrangement, Dipak Gupta, the Joint Managing Director, will carry out the duties of the Managing Director and CEO until December 31, 2023, subject to the approval of the RBI and the members of the bank.

He said the bank is required by RBI to have three senior positions of CEO, Chairman and Joint MD to step down by December 31, 2023.

We are all in a transition phase as per the regulatory guidelines. Since all three of us were supposed to exit by December 31, I felt it appropriate that we sequence the transition,” he said, adding that his decision was voluntary and that the board has accepted his resignation.

Kotak noted that the Board has appointed Dipak Gupta, whose term also ends on Dec 31, as the interim MD and CEO subject to RBI nod.

He said the lender has also confirmed today that it has made its application for the new CEO well in time to the RBI.

“We are awaiting RBI approval on the new CEO names. Hopefully within this period we will have RBI approval for the CEO who will then take charge from Jan 1, 2024,” he said.

Kotak said he has personal and family commitments with his older son's marriage in November and therefore, he had been mulling over the decision to step down for a while. "I just felt that it’s better that I move and step down in good time rather than hanker till the last date," he said.

The bank has taken steps it had to take to put in place its commitment to a smooth transition and the way forward looks very positive for the strength and stability of Kotak Mahindra Bank, the former MD and CEO said.

He added that he believes his bank has a tremendous opportunity and so does the Indian financial sector, which is in a unique position in history to transform itself. “I would love to see, in my position as a non-executive director and significant shareholder, this institution flourish in the years ahead.”

Kotak said the most important message is “what you create must outlive you.” “There has to be purpose, process, passion, trust, and transparency as you build an institution. It is very important to preserve the essence of entrepreneurship even in one of the most regulated sectors.”

He further said he was grateful to all stakeholders — board, employees, regulators, friends, family and others — who have helped him live his dream.

First Published:Sept 2, 2023 4:25 PM IST