Small banks struggle to find CEOs – Times of India

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MUMBAI: Small banks are finding it difficult to appoint a new CEO. They need an executive who can lead the digital transformation, but paying such candidates high salaries is a challenge for some smaller lenders. Even if they have financial strength, they still have to adhere to salary and banking experience restrictions RBI.
North East Small Finance Bankwhich recently merged with fintech firm Slice, is struggling to appoint a CEO. The bank urgently needs a chief executive as it navigates this transformational phase.
Based in Kerala Dhan Lakshmi Bank is plagued by succession uncertainty as the tenure of its current MD and CEO OJK Shivan ends next month. Bank is looking for candidates to pass the baton.
Founder of Equitas Small Finance Bank PN Vasudevan Accepted the board’s request to continue leading the company after he stepped down in 2022 due to the failure to find a new chief executive. The board then ended the more than a year-long CEO hunt.

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Many of the older generation private and microfinance banks are smaller than the larger NBFCs and financial constraints prevent them from offering the high-level salaries necessary to attract candidates with a deep understanding of the evolving economic landscape.

With large banks using digital services and apps to poach deposit accounts, smaller banks need leaders with versatile skills to drive change and develop strategies for digital services. At the same time, small bank CEOs need the leadership skills to manage organizations that effectively manage significant numbers of unionized staff.

The candidate has sufficient years of service remaining and should be prepared to work at a lower salary than senior peers due to RBI guidelines that discourage disproportionate pay in relation to profitability. RBI’s reluctance to approve candidates without banking experience further complicates the appointment process.

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In the case of large commercial banks, however, there is no dearth of candidates. Ashok Vaswani, Kotak Mahindra BankThe RBI-approved CEO nominee, a global banker previously with Citibank and Barclays, is set to take charge next week. However, large banks sometimes face the challenge of securing candidates who meet the approval of both the bank’s board and the regulator.

Business news,RBI,PN Vasudevan,North East Small Finance Bank,NBFC,Kotak Mahindra Bank,Dhan Lakshmi Bank,CEO,Ashok Vaswani

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