Nayak: Exit mode

Mumbai, April 4: P.J. Nayak, who is credited with scripting the growth story of UTI Bank, plans to put in his papers after July 31, when his term as chairman and managing director expires.

This follows the refusal of the Reserve Bank of India (RBI) to give an extension to Nayak for two more years. The central bank had proposed to bifurcate the office of the chairman and managing director to form two separate posts in accordance with the recommendations of the Dr Ganguly Group Report on Corporate Governance and in keeping with international best practices. It also sought a revised proposal from the private sector bank on whether Nayak could be reappointed as chairman or managing director. This, however, was not acceptable to Nayak.

UTI Bank has informed the stock exchanges that its board, at a meeting held on February 20, reappointed Nayak as chairman & managing director for two more years beginning August 1. This was subject to the approval of The Specified Undertaking of the Unit Trust of India (SUUTI) and the RBI and subject thereafter to the approval of shareholders.

UTI Bank said while SUUTI has formally approved Nayak’s reappointment, the Reserve Bank declined to give its nod and instead proposed that the office of the chairman and managing director should be bifurcated.

“Nayak has informed the RBI and the Remuneration and Nomination Committee of the board of the bank that after having spent over seven-and-a-half years as CMD, it would not be possible for him to function in a different and lesser capacity in the bank and he will, therefore, cease to be associated with it after July 31,” UTI Bank said. The matter will be discussed in the next board meeting on April 17, the bank added.