India's largest private lender HDFC Bank today said its board has finalised the names of three candidates, in the order of preference, for the position of the Managing Director & Chief Executive Officer (MD & CEO) of the Bank.

These three names have been shortlisted based on the recommendations of the Search Committee constituted by the Board and the Nomination and Remuneration Committee of the Bank, it said in a statement to the exchanges.

HDFC Bank will now submit its application to the Reserve Bank for its approval, with the names of the three candidates in the order of preference. Its current chief, Aditya Puri's term as MD & CEO of the bank is set to end on October 26th, 2020.

HDFC Bank last year had constituted a six-member search committee to replace Puri, who turns 70 in October, hitting the maximum age limit for a bank CEO as per RBI norms. The six member search committee comprises Chairman of the bank Shyamala Gopinath, board members Sanjiv Sachar, MD Ranganath, Sandeep Parekh, Srikanth Nadhamuni, and Renu Karnad from HDFC Ltd. Puri is also an advisor to the search committee. In addition, the bank had also roped in international headhunting firm Egon Zehnder to assist the panel identify the right candidate.

Puri has told CNBC-TV18 in an interview earlier that his successor could be an insider or outsider. He said, "I am rooting for the best candidate. I am saying an internal candidate is good because he would know the people, he would know the system, etc. and his acceptability is higher. So when you go outside you obviously look for that exception."

"We want to make sure that we hire the best candidate internal or external. There is a misconception that I do the vision, I do the strategy, I do the execution but it does not work like that. I wish I knew everything about technology, about last-mile distribution, about how the merchant functions but I don't - it’s a team and I am first among equals,” he had told CNBC-TV18.

RBI had recently put on hold two key board appointment proposals of the bank, asking it to review them and send them only after a new MD & CEO takes over from the current chief, Aditya Puri, in October later this year.

The board of the bank had proposed the appointments of Sashidhar Jagdishan and Bhavesh Zaveri as Additional Directors and Executive Directors of the bank but these key positions now remain vacant at the board level.

Both Zaveri and Jagdishan are both seen as strong internal contenders for the top job at the country’s largest private sector bank, as is its ED Kaizad M Bharucha, insiders suggested.

Various reports had suggested that Sunil Garg, head of Citi Commercial Bank could be the external candidate shortlisted by the bank, but CNBC-TV18 has not independently confirmed this.

Last month, research firm AllianceBernstein , while downgrading HDFC Bank had cited the delay in finding a successor for Puri as one of the triggers.

“Further, the bank’s non-proactive handling of management succession so far, could impact the bank’s preferred status among the investor community,” the AllianceBernstein note to clients said.

Also read: HDFC Bank Q4 net profit jumps 18% to Rs 6,927 crore, misses estimates

First Published:Apr 18, 2020 5:48 PM IST