After ICICI Bank and Axis Bank, there is yet another private bank facing succession blues. And this bank is the most unexpected one -- HDFC Bank Ltd.
Paresh Sukthankar, the man who was seen as a natural successor to Aditya Puri, MD & CEO, abruptly resigned on Friday from the largest private bank in the country.
Is there something more to it than what meets the eye? HDFC Chairman Deepak Parekh recently mentioned 'frictionless transition' whereas few months back Puri kicked up the row by saying the successor would be internal or external.
Aditya Puri, who will be retiring in 2020, had recently at an analyst meet hinted that his successor could also be an outsider. This surprised the market as well as bank's rank, as everyone thought Sukthankar has been groomed to take over from Puri.
Sukthankar was already the Deputy MD of the bank. Sukthankar was promoted from Executive Director to DMD in December 2013. He has been with the bank since its inception. He was handling the retail portfolio.
So, has he taken over new assignment outside fearing this changed script? "It will be a big loss as he was part of the strategy and was working very closely with Puri," says a banker.
In fact, the parent HDFC Ltd saw a smooth succession from an internal candidate as Keki Mistry was groomed to take over from Parekh. Lately, it was the HDFC Standard Life where the group had to look outside for talent, when they brought in Amitabh Chaudhary from Infosys to head the life insurance subsidiary. Chaudhary's name recently cropped up as the next Axis Bank MD & CEO. Is the group trying to retain him by offering him the bank's post?
In fact, the HDFC patriarch Parekh has been rooting for an insider, as an external candidate would lead to senior management leaving the bank. This will create uncertainty for the bank, which is the best in the industry in terms of growth, profitability and best asset quality.
Puri actually made a reference to this recently at the AGM. Puri, on the other hand, wants a proper evaluation of the candidates as the challenges bank is facing now especially from digital banking and new models in the rural market will require a new strategy.