The board of Axis Bank, is planning to engage with the Reserve Bank of India (RBI) on the issue of Shikha Sharma’s fourth term as MD and CEO.
While Sharma’s third three-year term will end in June 2018, the RBI has raised certain issues relating to the board’s decision to offer a fresh term from June 2018. “The board will engage in a dialogue with the RBI on the CEO issue and hopes to arrive at a mutually acceptable solution, ” said a person privy to the developments.
The RBI’s concerns relate to among other things the rising level of non-performing assets (NPAs) or bad loans with the bank reporting a divergence of Rs 5,633 crore in the second quarter of FY18 and Rs 4,867 crore in FY17. The bank has however said that, “In this connection, we wish to inform you that the Bank’s Board follows a standard process with regard to senior appointments, and forwards its recommendations to the regulator (to the extent required). This process is currently in progress,” when its response was sought.
“We have no further comments to offer as the report appearing in the media is speculative. We are conscious of our obligations to inform the stock exchanges of any material unpublished price sensitive information in terms of Regulation 30 of the Listing Regulations and shall continue to comply with the same in letter and in spirit,” the bank said.
The bank had witnessed two high-profile resignations a week ago. Sidharth Rath, head of corporate and transaction banking, and V Srinivasan, deputy MD, resigned from the bank. However, the bank declined to comment saying, “as a matter of policy, the bank does not comment on speculative assertions around its internal functioning.”
In 2017, the bank’s board started the search for a new MD and CEO and hired Egon Zehnder. Though some candidates were shortlisted, the board did not find them good enough and then plumped for Shikha Sharma amid reports of her considering other offers and also of a merger with another bank .