NEW DELHI: Uday Kotak, the founder and promoter of Kotak Mahindra Bank, has resigned as Managing Director and CEO of the private sector lender three months ahead of Reserve Bank's deadline.
He has ceased to be the Managing Director & CEO of the bank, with effect from September 1, 2023, on account of his resignation considered at the bank's board meeting held on Saturday.
Kotak, whose holding in the bank stands at 26 per cent, has become a non-executive director of the bank, Kotak Mahindra Bank said in a regulatory filing on Saturday.
As per the regulatory mandate restricting a managing director and chief executive's term to 15 years, the board of the bank had earlier this year decided to appoint Uday Kotak as the non-executive director after his current term ends in December.
As an interim arrangement, Dipak Gupta, the Joint Managing Director, will carry out the duties of the Managing Director & CEO until December 31, 2023, subject to the approval of the Reserve Bank of India and the members of the bank, it said.
Taking to microblogging site X formerly Twitter, Kotak said, "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 a smooth transition by sequencing these departures. I initiate this process now and step down voluntarily as CEO."
The bank awaits RBI approval of the proposed successor who would take charge from January 1, 2024, Kotak, who has been MD and CEO of the bank since its inception, said.
"As Founder, I am deeply attached to the brand Kotak and will continue to serve the institution as a Non-Executive Director and significant shareholder. We have an outstanding management team to carry the legacy forward. Founders go away, but the institution flourishes into perpetuity," he said.
A long time ago, he said, "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 sqft office in Fort, Mumbai. I have deeply cherished every bit of this memorable journey, living my dream."
Kotak Mahindra Bank is now a pre-eminent bank and financial institution, created on the basic tenets of trust and transparency, he said.
"We have created value for our stakeholders and provide over 1 lakh direct jobs. An investment of Rs 10,000 with us in 1985 would be worth around Rs 300 crore today. I am confident that this Indian-owned institution will continue to play an even more important role in India's transformation into a social and economic powerhouse," he said.
Kotak Mahindra Bank is among the few large private sector banks to have prominent promoter shareholders.
Kotak, in a handwritten message to the bank's Chairman Prakash Apte attached on X, said it is now time to move on and the decision to resign three months ahead of the expiry of his term is with the view to sequencing this process from a transition and stability perspective.
Incidentally, the term of the bank's Chairman is also coming to an end on December 31, 2023.
K V S Manian, who is also in the running to succeed Uday, had said that his role in the bank will be decided on merit.