Uday Kotak resigns as MD & CEO of Kotak Mahindra Bank

Uday Kotak on Saturday resigned as the Managing Director and Chief Executive Officer of private lender Kotak Mahindra Bank with immediate effect, the company said in a stock exchange filing on Saturday.

"I stand in a lonely place of being a founder, promoter and significant shareholder of this great institution. In these changing times, I envision an India leading the world in the years ahead," he wrote in a letter to the bank's board.

"Although I still have a few months to go, I tender my resignation with immediate effect. I have mulled over this decision for some time and believe this is the right thing for the institution," he wrote. Kotak has led the bank since its inception after converting the NBFC he founded in 1985 into a full-fledged commercial bank in 2003.

In the interim, Dipak Gupta, the Joint MD will takeover the responsibilities of Kotak until December 31, subject to the approval of the Reserve Bank of India and the members of the bank, it said.

Kotak Mahindra Bank, India's third-largest private lender by market value, recently denied that the banking regulator has suggested it hire an external candidate to succeed founder-CEO and richest Asian banker Kotak, who is set to give up executive responsibilities at the end of this year.

The bank's statement was in response to a Bloomberg report that said the central bank is nudging Mumbai-based Kotak Mahindra Bank to select someone outside the lender's ranks to lead the bank after its founder gives up an executive responsibility at the end of the mandated tenure.

India has tightened rules limiting bank CEOs’ tenure to a maximum of 15 years and has been reviewing the stakes that banks hold in insurers in order to strengthen the nation’s financial system. RBI had said in 2021 that the outgoing head should take a three-year cooling period and shall not be “appointed or associated with the bank or its group entities in any capacity, either directly or indirectly,” to ensure there is a clean break for the outgoing head from the bank.

Kotak has a net worth of about $14.5 billion, most of which comes from his 26% stake in the bank, according to the Bloomberg Billionaires Index.