“My daughter is the co-promoter of an NBFC which has received its licence from RBI in 2023. This point has been disclosed as required, to the Board and to RBI under various declarations. My being the MD of a bank and my daughter being the co-promoter of an NBFC are within the regulatory framework of the Banking Regulations Act,” Vasudevan pointed out in his resignation letter.
“In my investor meetings over the past 3 years, I have been repeatedly asked about the perceived conflict of interest. In reality there is no conflict of interest, since there is no transaction at all between our bank and the said NBFC (except one short term deposit about 21/2 years back, which was duly repaid on maturity). There are no other transactions including any loans by the bank to the NBFC,” he said.
“Inspite of my explaining to the investors, the perception of conflict continues to persist. I am told by investors that this ‘overhang’ is causing the stock to underperform, impacting value creation for both shareholders and employees. Sometimes perceptions are stronger than reality,” Vasudevan noted.
Under the circumstance, it is important that we remove the ‘overhang’ arising out of the perception issue. Accordingly, I would like to step down from the bank, he said.
“I have spent 20 years of my life dedicated to Cholamandalam, then after a brief stint at DCB Bank, another 20 years dedicated to Equitas. I hope I deserve a break,to enable me to focus on creating a solid corpus for our trust and dedicate it to a different segment of society”, Vasudevan said.
Vasudevan will discharge his duties as MD & CEO till a successor is identified.
He has been instrumental in the journey of Equitas since its inception as a microfinance institution in 2007 and itssubsequent transition into a Small Finance Bank in 2016. Under his leadership, the Bank has navigated multiple phases of growth and transformation, thus laying a strong foundation for its continued progress and success.
The bank’s board has advised the Nomination and Remuneration Committee to identify and recommend suitable candidates, both internal and external, for its consideration and approval. The appointment of the selected candidate shall be subject to the approval of the Reserve Bank of India and other regulatory approvals.
