What’s behind the CEO resignations in India’s private sector banks?

Sumant Kathpalia joins an inglorious list of private sector bank CEOs who had to resign in controversial circumstances due to mismanagement, corporate governance issues and regulatory problems. In the past five years, the CEOs of Yes Bank—the fourth largest private sector bank back then—and RBL Bank exited. The first instance was in March 2020, while the next was in December 2021. More recently, Bandhan Bank and Tamilnad Mercantile Bank (TMB) have seen CEO exits. Following is the list of private sector bank CEOs who had to quit under a regulatory glare.

Rana Kapoor
Kapoor had to leave the bank he co-founded after the RBI declined Yes Bank’s request for an extension because the lender had underreported NPAs for two consecutive years and the regulator found serious lapses in governance, compliance and credit culture. Deutsche Bank’s then India CEO Ravneet Gill joined the bank promising a clean-up and capital raise which never saw the light of the day. Finally, just before the Covid pandemic, a State Bank of India (SBI)-led consortium, with the blessings of the government, and the RBI, bailed out Yes Bank, injecting capital to stabilise the troubled lender. SBI initially acquired a 49% stake in Yes Bank which was reduced substantially as the bank raised further capital.

Vishwavir Ahuja
Ahuja’s 12-year tenure as CEO of RBL Bank came to an abrupt end on Christmas eve in 2021 after he decided to proceed on leave following regulatory questions. Uncertainty over his tenure continued for months because the RBI had approved his reappointment as CEO for a period of only one year, instead of the three-year term sought by the bank. RBL came under the regulator’s radar due to rising NPAs especially on large corporate loans which had impacted the bank’s profi tability. Executive director Rajeev Ahuja took over as interim CEO before former Indian Overseas Bank CEO R Subramaniakumar took over as CEO in June 2022.

Chandra Shekhar Ghosh
Ghosh, founder of micro-fi nance institution turned commercial privatesector lender Bandhan Bank stepped down as CEO in July 2024 after the RBI did not clear his re-appointment for three more years in November 2023. His exit came amid reports that big-four fi rm EY was conducting a forensic audit on a portion of Bandhan Bank’s loan book. National Credit Guarantee Trustee Company (NCGTC) was conducting the audit on loans worth Rs 23,300 crore. Former SBI executive Partha Pratim Sengupta took charge of the bank on November 1, 2024 for a three-year term.

S Krishnan
Krishnan resigned as CEO of Tamilnad Mercantile Bank days after the bank mistakenly credited Rs 9,000 crore to a cab driver in Chennai in September 2023. Though in his resignation letter, Krishnan said he decided to resign due to “personal reasons”, his leaving the bank, months after its IPO and with still about 2/3rd of a term to go gave enough hints that corporate governance issues were the reason. After almost a year of search, former SBI DMD Salee S Nair was appointed the CEO in August 2024.