Kotak Mahindra Bank's new outsider CEO Ashok Vaswani seen as break from billionaire founder
Reserve Bank of India backed an outsider with little experience in the country to lead Kotak Mahindra Bank Ltd., surprising analysts and senior management and sending its stock falling.
In a rare move for an Indian lender, Kotak went outside its own ranks with the selection of Ashok Vaswani as chief executive officer. Some senior managers were shocked and disappointed, as investment banker K.V.S Manian was seen as the front runner, according to people familiar with the matter.
The bank’s board submitted both names for consideration and The Reserve Bank of India, which approves all senior bank appointments, chose Vaswani.
Kotak shares fell as much as 2.7% Monday partly on concern that the move could lead to turnover among senior executives who were expecting Manian to replace the billionaire founder and former CEO Uday Kotak, who stepped down last month. The stock recouped part of the losses on Wednesday.
“We need to see how he fits into Indian banking environment, and whether there are senior management exits or any internal flux,” wrote Suresh Ganapathy, head of financial services research at Macquarie Capital.
Vaswani, whom Kotak describes as a “global Indian,” is a veteran of Barclays Plc in the UK and Citigroup Inc.
in Asia-Pacific. A former president of Pagaya Technologies Ltd., a US-Israeli artificial intelligence fintech company, Vaswani will join Kotak on Jan.
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While some analysts were surprised at the move, India’s central bank had been nudging the bank to opt for someone outside the company to replace Kotak, Bloomberg News reported in July. With a newcomer in charge, the founder won’t be in a position to unduly influence management decisions, according to the people familiar, who asked not to be
