Uday Kotak has stepped down as the MD and CEO of Kotak Mahindra Bank effective September 1, the lender told the stock exchanges on September 2.

Share Market Live

NSE

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

"Succession at Kotak Mahindra Bank has been foremost on my mind, since our Chairman, myself and Joint MD are all required to step down by year end. I am keen to ensure smooth transition by sequencing these departures. I initiate this process now and step down voluntarily as CEO," Kotak said in a post on X, soon after resigning.

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, the lender added.

Succession at Kotak Mahindra Bank has been foremost on my mind, since our Chairman, myself and Joint MD are all required to step down by year end. I am keen to ensure smooth transition by sequencing these departures. I initiate this process now and step down voluntarily as CEO.…

— Uday Kotak (@udaykotak) September 2, 2023

In a heartfelt post Kotak said, “A long time ago, I saw names like JP Morgan and Goldman Sachs dominate the financial world and dreamed of creating such an institution in India. It is with this dream that I started Kotak Mahindra 38 years ago, with 3 employees in a 300 square feet office in Fort, Mumbai. I have deeply cherished every bit of this memorable journey, living my dream.”

In a resignation letter to the Chairman of Kotak Mahindra Bank, Kotak said, although he still has a few months to go, he wanted to tender his resignation as MD & CEO of bank with immediate effect.

Also Read: India can transform into a $30 trillion economy by 2047 led by the financial sector, says Uday Kotak

"I have mulled over this decision for sometime and believe it’s the right thing for the institution...On Dec 31, 2023 my term, along with the Chairman and Joint MD Dipak Gupta’s terms will expire...With a view to sequencing this process from a transition and stability perspective, I’ve decided to take this action," he said, adding that the move awaits nod.

He added that over the next few months, he is going to be significantly occupied with some personal and family commitments as his elder son’s marriage functions are being planned. Considering the proximity of these events to the end of his tenure, he said he thought it appropriate to pass on the baton.

Reacting to the surprise decison of Kotak, market expert Ambareesh Baliga said though he is continuing as a non-executive director, his absence will be felt as he is the founder and has been hands-on all through.

"This early step down will have a negative sentimental impact on the stock and could stay under pressure till RBI clears the name of the proposed successor," he said.