The Reserve Bank of India has approved Carol Furtado's appointment as interim chief executive officer of Ujjivan Small Finance Bank following the sudden resignation of MD & CEO Sanjeev Nautiyal. According to The Economic Times, the RBI's approval is for three months or until a new MD takes charge, whichever is earlier. The appointment follows Nautiyal's resignation citing health grounds, with the former managing director of State Bank of India taking charge of Ujjivan on July 1, 2024 for a three-year term. The bank's board accepted Nautiyal's request for early retirement at its meeting on Tuesday and approved Furtado's interim appointment, subject to RBI approval. Nautiyal ceased to be MD & CEO and key managerial personnel from September 1, with the bank's board initiating the process of identifying Nautiyal's successor and submitting its recommendation to the RBI in due course.
Nautiyal ceased to be MD & CEO and key managerial personnel from September 1, with the bank's board accepting his early retirement request at its meeting on Tuesday. As reported by The Economic Times, Nautiyal sought early retirement through an email sent on the evening of August 31, citing health issues. He will remain on leave during the three-month notice period and formally retire from the bank on November 30, according to the bank's exchange filing. A bank official noted during the analyst call that the bank would like to make better succession planning in the future. "We would like to make better succession planning in the future," a bank official said in a hurriedly arranged analyst call following the board meeting.
Carol Furtado brings more than three decades of banking experience across business, strategy, operations, people and institutional functions. According to The Economic Times, she has been part of the leadership team that laid the foundation of Ujjivan and has contributed to business growth and organisational development. Furtado was appointed as Executive Director and Whole-Time Director at Ujjivan Small Finance Bank and has been part of the bank's leadership team through its growth and transformation. During her current role as executive director, she has contributed to business growth and organisational development. At the analyst call, Furtado expressed confidence about business continuity during the transition period. "We remain confident about business continuity," Furtado said at the analyst call. The bank's board noted that the bank's leadership development initiatives and robust succession planning ensure that the organization remains well-equipped to address current operational needs and manage this transition period seamlessly.
The leadership transition has resulted in significant market volatility, with Ujjivan SFB shares falling 5.4% to ₹65.40 on BSE as of Tuesday following the announcement. According to The Economic Times, investors were seen offloading their positions reacting to the development. The share price decline reflects investor concerns about the sudden leadership change and the ongoing succession planning process. The stock performance shows historical returns of -5.47% (1 day), -7.06% (5 days), -8.95% (1 month), +12.52% (6 months), +53.07% (1 year), and +229.95% (5 years). A bank official noted during the analyst call that the bank would like to make better succession planning in the future.
The leadership transition comes at a critical time when Ujjivan was trying to diversify its business and reduce the weightage on unsecured microfinance loans to improve business stability. As reported by The Economic Times, the bank is working towards upgrading its status from a small finance bank to a universal bank. The RBI in April returned the bank's universal bank application asking to diversify businesses more. The development occurred at a time when Ujjivan was actively working towards diversifying its business portfolio to improve operational stability and reduce dependence on unsecured microfinance loans.
