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The board of the Federal Bank will look at both internal and external candidates as suggested names to be submitted to the RBI to succeed MD and CEO Shyam Srinivasan following the end of his term in September 2024.
“There is a formal process underway, and we believe that in the next few months this process will yield results. We have two EDs with exemplary capability, and a formal search process is underway. I’m sure we’ll find the most appropriate candidate for the job well in time,” Srinivasan said in the bank’s Q3 earnings call.
The search process is just being rolled out, and in addition to the internal candidates, the board of choice will also look at external candidates, he said.
The Federal Bank had, in October 2023, approached the central bank seeking a one-year extension for Srinivasan as the MD and CEO of the bank post-September 22, 2024. However, earlier this month, RBI sought at least two new names from Federal Bank for the post with “regard to the likely tenure of the candidate and the longer term requirements of the bank.”
“The way we’ve interpreted that is that the regulator is probably not inclined to offer one-year extensions and therefore prefers a new name that will play a longer innings,” Srinivasan said, adding that the central bank’s preference seems to be not to offer one-year terms.
As per regulatory norms, the post of MD and CEO or a whole-time director at a private sector bank has a cap of 15 years. Srinivasan will complete 14 years at the helm of the bank after the completion of his current three-year term.
The regulator requires the names to be submitted at least four months prior to the end of the term, and thus the board should be able to send the preference list by April-end or early May, he added.
Asked if he would prefer to hold a director position at the bank post-retirement, Srinivasan said that the regulator does not permit such posts and that it is not good governance.
“I may be associated with the board, with the bank’s other subsidiaries in whatever form is permissible, but not with the parent bank; that’s not good governance,” he said.
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