Equitas SFB CEO to exit over conflict-of-interest worries, shares slump

what happened

Reuters reports that Equitas Small Finance Bank said on Thursday its long-serving chief executive and managing director, P N Vasudevan, will step down. The move follows worries about a perceived conflict of interest, since his daughter runs a non-banking finance company. The shares sank as much as 20% in trading.

In his resignation letter, Vasudevan argued that the arrangement had been reported to the board and to the Reserve Bank of India, and that no conflict existed. He added that investors had kept raising the matter and that it weighed on the stock. The board has asked him to remain until a successor is chosen, and the nomination committee is looking at internal and external candidates.

why it matters

Vasudevan has run the lender for more than a decade and earlier tried to leave in 2022 before withdrawing. The episode highlights governance risk at a mid-sized lender, and the stock had already fallen 9.2% this year. Uncertainty over leadership and the central bank's earlier questions may keep investors cautious until a new head is named.

market impact

Equitas shares: CEO exit and conflict-of-interest questions weigh on the bank's stock

• ▼Equitas SFB shares pressure down — CEO exit and governance questions weigh on the stock

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