No timeline for locating new Equitas SFB CEO, we don’t want to make a mistake: PN Vasudevan

The purpose for which I want to leave, I have put that out in my letter. There is so much we can do for society. As a family, we want to focus on that and do a lot of things which can help a lot of people out there, who are not as privileged as you and me. But I can do it the day after tomorrow instead of tomorrow. So there is no issue with that.

We are not putting a timeline around the whole process, we do not want to make a mistake. We are very clear that we can take a few more months if required but not make a mistake of getting a wrong person in place and so there is no timeline as such and whatever time it takes we will go through it and get the right candidate into the bank at that point in time.

Will the right candidate be an external candidate or are you looking internally for a replacement or for a successor. Apart from the position at the helm, are there any other specific gaps in the bank’s management that you are looking to plug?
We have a very strong management team and there is no gap as such in terms of any particular skillset in the bank at this point in time. We have no particular skillset which we desperately need and which we will try to fill in through this process. Such a thing does not exist or we are very comfortable in terms of the overall management capability and bandwidth that we have currently.

In the last board meeting, the board had decided to elevate two of my colleagues as whole-time directors and of course that is subject to approval from both shareholders and RBI. Both of them again come with very strong experience in both the banking and the lending space and we believe that we have a very capable team in place and there is no particular gap that we needed to fill up. It is basically the successor that we need to identify and put in place.

Your tenure will be ending sooner at Equitas Small Finance Bank and you will stay on as the MD & CEO till the transition is actually complete. How long will that take? Also are there no objections from RBI with regards to this particular change of guard?
My current tenure ends on July 23, 2022, A few months back, the board had approved my extension for three more years and we had applied RBI for a regulated approval for a three year extension which is currently under process, but yesterday in the board meeting, when we had discussed about this particular transition aspect, the board in view of this transition process in place, has decided to go back RBI and ask for a one year extension for my tenure from July 23.

On the basis of that decision, we should be shortly applying to RBI for a one year extension in place of the three year extension that we had applied sometime back. That is the first part of it. The second question that you ask me was whether the regulators have been informed about this whole succession transition process. We have been in touch with the regulators and we have informed of the entire process.

After you vacate the post of MD & CEO, will you remain as part of the board going forward?
Yesterday the board had also discussed that and said that they would be happy to have me continuing in some capacity or the other to be associated with the bank, subject to the regulatory guidelines which may be prevailing at that point in time. From my side, I will be very happy, very keen to have any kind of association with Equitas. After all, Equitas is like my own baby and so if there is any chance and any opportunity to remain associated with Equitas, I will be more than happy. But it is again subject to what will be the regulatory framework that may prevail at that point in time.

This news has not gone down well with the investors. If one looks at what has happened to the stock price today, should stakeholders look at this particular move that has come about? Also how should stakeholders look at your stake in the entity?
Equitas is a Latin world and means equitable, which means being fair and transparent. So right from 2007, when we started Equitas as a microfinance company till today, Equitas has always run on very high governance standards, absolutely fair and totally transparent to everybody that we deal with, all our stakeholders, be it our customers, be it our employees, be it our investors, be it our regulators, be it the media, be it anybody we have always tried to run our operations in the most fair and most transparent manner possible for all our stakeholders.

It is my personal view, I cannot say what the stakeholders will be thinking but from our perspective, from my personal perspective, I believe that all our stakeholders will have a very high level of comfort with the way we have run the bank so far. I do not think we have ever had even a single person raise their finger or point their finger at us on any kind of a governance issue.

It will never arise because our governance value system is something which runs deep in the bank. It is not just me who is holding the flag in the bank on this kind of aspect. It is something running right down to the last 18,000 persons in the bank.

But you have to admit that this leadership change issue creates a bit of a regulatory overhang. The question a few people are asking is whether this impacts the bank’s aspirations for a universal banking license and a merger in the future? Also, whether you will continue to serve on the board till that transition to a universal bank takes place?
Technically, we have completed five years. Technically, we are qualified to apply, but we have this regulatory compliance requirement to be still met which is the merger of the holding co with the bank.

That is still pending and that is under work and we have got the NOC from RBI recently which was published and we are now awaiting SEBI approval shortly. The two stock exchanges, we understand, have already cleared and sent it to SEBI so we are hoping to get the SEBI approval soon and following that NCLT and shareholder approval. So that process is on.

Applying for the universal bank license, this regulatory compliance is something we need to complete and get behind us. We are working hard to try and get it done as quickly as we can and we will continue to be in touch with the regulators and as soon as we get a comfort from them, we should definitely apply.

Whether I will continue to remain on the board till the universal bank license comes again, is a little far into the future. At this point, it is difficult to speculate or talk about that. Let us hope that we can fast forward and get all the approvals in time as quickly as we can.

Have you taken note of any timeline for this particular merger?
We believe that all the processes take time normally and we believe that by March 2023, we should complete the merger but let us see we will try and push it even faster if we can.