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India’s Kotak Mahindra Bank Taps Outsider As New CEO To Replace Its Billionaire Founder Uday Kotak

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In what is being seen as a surprising choice, Kotak Mahindra Bank, one of India’s largest lenders, announced that Ashok Vaswani, a former Barclays Bank and ex-Citigroup executive, will be its new managing director and CEO. The Reserve Bank of India (RBI) approved the appointment on Friday, choosing Vaswani from the two names submitted by Kotak Mahindra Bank as candidates to replace its billionaire founder and longtime boss, Uday Kotak. (The other candidate is believed to be a longtime insider.)

In September, Kotak himself took the unexpected step of stepping down as managing director and CEO of the bank, four months before he was due to retire, saying that he was doing so to ensure a smooth transition. In a company statement about Vaswani’s appointment, the billionaire banker, who is now a non-executive director at the bank, said that he was proud that the bank was bringing a “global Indian home to build Kotak and India of tomorrow.”

In the same statement, Vaswani said that his goal was to ensure that Kotak Mahindra Bank plays a meaningful role in India’s journey to be one of the top three economies in the world in the next five years.

Vaswani comes to Kotak Mahindra Bank from Pagaya Technologies, a U.S.-Israeli AI fintech startup, where he is president. Previously, he was CEO of Barclays Bank in the U.K. and CEO of Citigroup Asia Pacific. Vaswani grew up and studied in India, graduating from Sydenham College of Commerce and Economics in Mumbai and qualifying both as a chartered accountant and company secretary.

Kotak’s retirement was triggered by RBI’s 2021 rule capping the tenure of an owner-CEO of a bank at a maximum 15 years. Kotak, 64, who at the time had run the bank for 18 years, had regulatory approval to complete his term until December but chose to step down earlier.

Analysts say that the appointment of an outsider as CEO is a surprising choice as the bank had a strong internal candidate, who was widely expected to succeed. “But it looks like the RBI had its way,” says one banker.

The succession at Kotak Mahindra Bank has been a hot topic for months as it has been a founder-led institution from its very beginning as a small finance firm in 1985. Kotak, who set it up with the backing of billionaire Anand Mahindra of the Mahindra group, converted it into a bank in 2003, when he secured a much-prized banking licence.

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