August 20, 2021 03:19 PM
Ujjivan Small Finance Bank’s board will meet on August 25, 2021, to select an Officer on Special Duty (OSD) to work alongside Chief Executive Nitin Chugh, who resigned abruptly, to ensure smooth transition.
His sudden decision to quit the bank comes amid a sharp rise in stress on the loan book and a huge loss in the first quarter. Nitin Chugh became the managing director & chief executive in December 2019 for three year years.
Ujjivan Small Finance Bank’s board has seen a big churn at the top in the last four months with six board level resignations, including those of MD&CEO and the Chief Financial Officer (CFO). The CFO resigned soon after the first quarter ended in June 2021. The bank has also seen a spate of resignations at the middle level and the field staff.
Samit Ghosh, who was inducted as director on board last night, told Business Standard that the bank’s immediate priority is to ensure a smooth transition, manage asset quality and stem the tide of resignations.
The OSD would work with the interim chief executive after Chugh leaves and till a full time MD&CEO is appointed. The bank was in touch with banking regulator RBI on dealing with the current challenge and on the appointment of its new CEO, who can be an internal or an external candidate. It would take three-four months to complete the process.
Simultaneously, the bank would work on the reverse merger of the holding company with the bank. It will approach the RBI in November with the proposal for reverse merger.
B A Prabhakar, ex-CMD of Andhra Bank and Ravichandran Venkataraman, also a banker, have joined the board as independent directors. Another director, Sudha Suresh, has been associated with Ujjivan for around 14 years and served as the CFO and MD of the holding company, and will play a pivotal role during the reverse merger.