“Nitin Chugh’s resignation has come as a surprise,” said the Ujjivan founder and non-executive chairman of the holding company. Samit ghosh he told ET. “In fact, it is cause for concern that several people on the leadership team, which we have built over the past 16 years, have left,” he said.
Ghosh is scheduled to join the bank’s board as an additional director (non-executive, non-independent) starting August 20, and will hold the position until the bank’s annual general meeting.
After that, Ghosh is scheduled to become the joint director of both the bank and the holding company.
During the last year, several older people, such as
Furtado, Abhiroop Chatterjee, Rajat Singh, Sneh Thakur and Manish Kumar left the bank creating a leadership gap.
“The holding company is very concerned about this high attrition. Now, we have to rebuild the leadership team,” Ghosh said.
“The holding company wanted me to come out of semi-retirement and join the bank’s board to guide this scenario and help with the reverse merger process. The transition to a new CEO will now be another challenge,” Ghosh said. said.
The bank’s gross non-performing assets ratio jumped to 9.8% at the end of June 30, 2021 from just 1% a year ago. While all microfinance-focused lenders have faced stress amid the pandemic, special attention and planning is required to recoup loans in the field. Chugh’s surprising resignation at this juncture makes the situation bleak.
In principle, the Reserve Bank of India has allowed the reverse merger of holding companies with small financial banks. Ujjivan has proposed to request the same around October this year. It will complete five years on January 31, 2022.
Meanwhile, the bank’s board of directors also appointed former Andhra Bank president BA Prabhakar as another additional director and appointed him as the future president of the bank. Non-executive chairman B Mahapatra, who was the chief executive of the Reserve Bank of India, also resigned in February after a short 10-month stint. He had been on the bank’s board of directors as an independent director since 2017.