Uday Kotak has stepped down as the Kotak Mahindra Bank managing director and chief executive officer with effect from September 1, the bank said in a communication to exchanges on September 2.
However, Kotak will continue as a non-executive director of the bank, it said. Uday Kotak’s tenure as the chief executive officer and managing director of the bank ends on December 31, 2023, according to a media report by Moneycontrol.
As an interim arrangement, Dipak Gupta, the joint managing director, will carry out the duties of the MD and CEO until December 31, subject to the approval of the RBI and the members of the bank, it said.
Kotak, in a communication on social media said he is stepping down to facilitate the succession plan at the bank.
"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 smooth transition by sequencing these departures. I initiate this process now and step down voluntarily as CEO" Kotak said.
Fruther, the bank is awaiting RBI approval of the proposed successor, Kotak said.
In February this year, Bloomberg had reported that board has engaged consulting firm Egon Zehnder to lead a global search for a chief executive officer to replace its billionaire founder Kotak.
Kotak has been leading the bank since its inception as a non-banking financial institution in 1985. It became a commercial lender in 2003. He has a net worth of about $13.4 billion, according to Bloomberg Billionaires Index.
Kotak along with relatives and enterprises in which he has beneficial interest holds 25.95 percent of the equity share capital of the bank and 17.26 percent of the paid-up share capital of Kotak Mahindra Bank Limited as on March 31, 2023.
Kotak, in his message, said as founder, he is deeply attached to brand Kotak and will continue to serve the institution as 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," Kotak said.
"A long time ago, 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 said.
Kotak also added that the bank has created value for the stakeholders and provided over 1 lakh direct jobs. "An investment of ₹10,000 with us in 1985 would be worth around ₹ 300 cr today," Kotak said.