Axis Bank stated yesterday that it has shortlisted three candidates who could succeed Shikha Sharma as its MD & CEO after she steps down in December.
Axis Bank said in a filing with the stock exchanges that the bank has submitted the list of candidates to the RBI for its approval, and once the banking regulator selects the candidate, the process of succession will begin.
The bank stated, “In terms of extant RBI norms and the Succession Planning Process of the Bank, the Board of Directors of the Bank at its meeting held on 9th July 2018, has recommended the names of three candidates, in order of preference, for the approval of the RBI.”
It did not disclose any names but some names doing the rounds include that of Bank of Baroda CEO P S Jayakumar and bank insiders V Srinivasan and Rajiv Anand.
It may be noted that Sharma’s third three-year term was coming to a close on June 30, 2018, and the board had originally approved another three-year extension last year.
However, the banking veteran decided to shorten working tenure till December 2018 amidst concerns raised by the Reserve Bank of India about her fourth term. RBI had written to the board of Axis Bank asking to reconsider their decision of giving the fourth term to Sharma as MD & CEO raising worries over rising bad loans in the country and the consequent dip in its profitability after the asset quality review in October 2015. A question was also raised on the governance issues like inquiries into earning leaks over WhatsApp
As per Sharma, the asset quality deterioration was due to the bank’s infrastructure bets over last few years, which haven’t paid off well. Axis bank’s gross NPA ratio jumped to 6.77 percent in March 2018, against five percent a year ago.
Subsequently, in April this year, Sharma announced her decision to step down by December.
The bank then roped in Egon Zehnder, a global leadership advisory firm, to undertake the executive selection process. The succession process is likely to be completed before the end of Mrs. Shikha Sharma’s tenure.