Adopting a seemingly cautious approach, the Reserve Bank has approved appointment of Sandeep Bakhshi as ICICI Bank's Managing Director and Chief Executive Officer for three years as against a five-year term sought by the lender.
ICICI Bank on Tuesday informed the stock exchanges that the Reserve Bank of India (RBI) has cleared Bakhshi's appointment for three years effective from October 15.
After ICICI group veteran Chanda Kochhar - who was facing inquiry related to alleged nepotism and quid pro quo in extending loans to certain entities - resigned earlier this month, the bank announced appointment of Bakhshi as the MD and CEO for five years.
In recent months, the RBI seem to be exercising a cautious approach when it comes to re-appointment of chiefs of private sector banks, especially against the backdrop of rising non-performing assets in the banking system.
Last month, the central bank curtailed the proposed three-year term for Yes Bank MD and CEO Rana Kapoor, whose tenure was extended only till January end. Similarly, the RBI had reportedly taken a tough stance in the case of re-appointment of Shikha Sharma as Axis Bank MD and CEO.
"We wish to inform you that RBI ... (on October 15, 2018) has approved the appointment of Sandeep Bakhshi as Managing Director and CEO of the Bank for a period of three years with effect from October 15, 2018," ICICI Bank said in a BSE filing.
Bakhshi, who joined the ICICI group in 1986, was elevated from the post of Chief Operating Officer (COO) to MD and CEO of the bank after resignation of Kochhar on October 4.
The bank's board had decided that Bakhshi would have a tenure of five years until October 3, 2023. However, the proposed term has been cut to three years by the RBI.
Shares of ICICI Bank rose 2.5 per cent to close at Rs 321.05 on the BSE.
Bakhshi was appointed as the MD and CEO of ICICI Prudential Life Insurance Company in August, 2010. Under his leadership, the company re-designed various products, re-engineered the distribution architecture and made significant improvement in productivity.
Facing enquiry over the charges of nepotism and conflict of interest, Kochhar had quit the bank on October 4, six months before the end of her tenure.
Kochhar, 57, had also resigned from all subsidiaries of the bank, including ICICI Securities.
In September, the RBI had curtailed the three-year term that the Yes Bank's board had sought for Kapoor, also one of the promoters of the bank, to January 31, 2019, and asked the bank to find a replacement. The lender had sought a three-year extension till August 31, 2021 for Kapoor.
In April, the Axis Bank board curtailed the fourth term of Sharma as MD and CEO to seven months following an unusual request from her that she be relieved on December 2018 -- 29 months ahead of the scheduled term.
The board's decision came against the backdrop of the RBI raising questions over her re-appointment in the wake of mounting non-performing assets.