Shares of Federal Bank Ltd. fell as much as 6% in opening trade on Tuesday after some top-level rejig that took place at its private peer Kotak Mahindra Bank on Monday evening.
Kotak Mahindra Bank informed the exchanges that KVS Manian, the current Whole-time director at the bank has been elevated to Joint Managing Director, while Shanti Ekambaram, who was also a Whole-time Director, has been elevated to Deputy MD of the bank.
The reason why Federal Bank is impacted due to these developments is that CNBC-TV18 had reported on February 15 citing sources, that the lender had shortlisted KVS Manian's name as one of its potential MD & CEO candidates to be submitted to the Reserve Bank of India. The lender is expected to submit three names to the central bank.
This is part of the succession planning at the Kochi-based lender. Federal Bank's current MD & CEO Shyam Srinivasan, who took over the reins in 2010, will see his term end on September 22 this year.
According to RBI guidelines, a CEO can stay with a bank for 15 years if they are not a promoter. Based on this, Srinivasan was eligible to stay on for another year at the bank, a request the RBI rejected.
Shares of Federal Bank are trading 4.9% lower at ₹155. The stock has risen 23% over the last 12 months.
(With Inputs From Abhishek Kothari & Sudarshan Kumar.)
First Published: Feb 20, 2024 9:30 AM IST
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