RBI names former central banker on Bandhan Bank board to aid succession

While the slope precocious connected Monday announced RBI’s determination to name retired main wide manager Arun Kumar Singh arsenic an further manager connected its board, it did not specify the rationale down the step. 

A idiosyncratic acquainted with the improvement said RBI’s determination was apt to guarantee a creaseless modulation astatine Bandhan Bank considering its succession process is inactive ongoing. Also, Singh would enactment oversight of the bank’s committee of directors.

“The regulator does not person immoderate broader interest with the slope and the further manager was enactment successful to assistance succession," said this person, speaking connected information of anonymity.

Mint had reported successful December that big-four accounting steadfast EY was conducting a forensic audit connected a information of Bandhan Bank’s indebtedness publication that’s backed by authorities guarantees. The bank’s absorption has clarified that the audit had nary nexus to Ghosh’s determination to retire.

RBI and Bandhan Bank did not instantly reply to Mint’s queries.

No successor yet

Analysts judge RBI’s determination to name Singh is to guarantee due functioning of Bandhan Bank.

“The contented successful the lawsuit of Bandhan (Bank), successful our view, is that determination aren’t capable interior candidates successful the slope who person served the slope for a agelong clip astatine committee level to beryllium eligible for the CEO position," Suresh Ganapathy, managing manager and caput of fiscal services probe astatine Macquarie Capital, said successful a enactment to clients connected Tuesday. 

“While the marketplace whitethorn fearfulness that determination could beryllium much skeletons successful the closet (in presumption of further summation successful the accent pool), we judge this is much of a prudent measurement exercised by the RBI."

Also work | Bandhan Bank’s plus prime issues, precocious recognition outgo support investors connected edge

RBI has appointed 60-year-old Singh for a play of 1 year, till 23 June 2025, oregon till further orders, whichever is earlier. A postgraduate successful economics and an MBA successful concern and quality resources, Singh is besides a Certified Associate of the India Institute of Banking (CAIIB) and worked astatine RBI for astir 36 years. 

He has served arsenic an RBI nominee manager connected the boards of 5 banking and non-banking entities, arsenic per Bandhan Bank’s banal speech filing.

“(Singh) has worked successful assorted capacities successful the tract of non-banking supervision, regulation, banking supervision and regulation, fiscal inclusion, monetary policy, accusation technology, enforcement actions against banks and non-banks, authorities banking, etc," Bandhan Bank said successful its filing. 

Ghosh’s exit

Bandhan Bank’s committee successful November approved Ghosh’s reappointment for 3 much years, and was awaiting RBI’s clearance.

In April, Ghosh announced helium would measurement down arsenic managing manager and main enforcement erstwhile his word ends connected 9 July. In his resignation letter, Ghosh said helium was looking to presume a broader strategical relation aft stepping down, but did not specify what that would be.

Also work | Bandhan Bank's Ghosh not to beryllium portion of the committee post-retirement

“I americium neither an economist nor a banker. I americium a axenic NGO worker," said Ghosh, who has helmed the slope since its inception successful 2015. “I consciousness blessed to permission down a beardown franchise successful the hands of a susceptible enactment team, galore of whom person partnered maine successful gathering the organisation, ceramic by brick, sharing the aforesaid imaginativeness and values."

Speaking to analysts and investors a fewer days later, Ghosh had clarified that the bank’s committee would commencement the process of uncovering his successor and expected the names of candidates to beryllium finalised by July. 

“The slope is acceptable to instrumentality the adjacent leap of maturation with susceptible leadership. I tin guarantee you connected behalf of the committee that it volition beryllium a creaseless transition," helium had said. “By July archetypal week, the committee volition determine whether determination is simply a request for an interim CEO." 

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Published: 25 Jun 2024, 10:01 AM IST