Who is PN Vasudevan? What did he say about stepping down as Equitas Small Finance Bank CEO? Explained
Equitas Small Finance Bank said on Thursday that its longtime managing director and chief executive officer, PN Vasudevan, would step down, citing personal and social initiatives. The announcement sent the bank’s shares tumbling as much as 20% during the trading session.
Vasudevan’s proposed departure is not the first time he has sought to leave the bank. In 2022, he planned to step down to paursue philanthropic activities but withdrew his resignation after the board requested that he continue.
After nearly 40 years in the financial services industry, Vasudevan has expressed a desire to take a break, build a corpus for his trust and focus on a different segment of society.
He founded Equitas in 2007 as a microfinance company before obtaining a banking license from the Reserve Bank of India and converting the firm into Equitas Small Finance Bank in 2016.
Before starting Equitas Microfinance, he served as the Head of the Retail Assets Division at Cholamandalam Investment and Finance Company Ltd.
In his resignation letter, Vasudevan said he wanted to remove an “overhang” on the bank’s stock stemming from perceived conflict-of-interest concerns involving his daughter, who co-promoted a non-banking financial company (NBFC) licensed by the Reserve Bank of India (RBI) in 2023.
“In my investor meetings over the past 3 years, I have been repeatedly asked about the perceived conflict of interest. In reality there is no conflict of interest, since there is no transaction at all between our bank and the said NBFC…” he said.
Vasudevan said investors had expressed concerns that the issue was weighing on the bank’s share performance. He maintained that the arrangement had been disclosed to the bank’s board and the RBI and that there was no conflict of interest.
“Inspite of my explaining the above to investors, the perception of conflict continues to persist. I am told by investors that this ‘overhang’ is causing the stock to underperform, impacting value creation for both shareholders and employees,” he said.
“Sometimes perceptions are stronger than reality. Under the circumstance, it is important that we remove the ‘overhang’ arising out of the perception issue,” he added.
"Sometimes perceptions are stronger than reality," said Vasudevan .
Vasudevan’s daughter, Varshini Vasudevan Pathangi, founded Unico Housing Finance, an unlisted NBFC, in 2023.
The relationship has drawn regulatory attention, according to media reports. Earlier this year, the RBI reportedly contacted Equitas Small Finance Bank’s board and senior management to understand the relationship between the lender and Unico.
Reports also suggested that the central bank had questioned board members about whether they were fully aware of the relationship when Vasudevan’s tenure as managing director was extended.
In August, Equitas said it had undertaken only one deposit transaction with Unico and that no other transactions had taken place up to that point.
The bank’s board said on Thursday that it had requested Vasudevan to remain in his position until a successor is identified.
Equitas has asked its nomination and remuneration committee to begin the search for a replacement, considering both internal and external candidates.
The leadership transition comes after Equitas Small Finance Bank reported strong business growth. Its total business crossed ₹1 trillion in the September quarter, while quarterly net profit reached a record ₹2.18 billion, or approximately $22.9 million, according to Vasudevan.
Despite the reported growth, the bank’s shares have declined 9.2% so far this year. Thursday’s sharp fall followed the announcement of Vasudevan’s planned departure amid continuing questions over the perceived conflict of interest.
For about a decade, Livemint—News Desk has been a credible source for authentic and timely news, and well-researched analysis on national news, business, personal finance, corporates, politics and geopolitics. We bring the latest updates on all the listed companies on BSE and NSE, startups, mutual funds, Union ministries, geopolitics, and untapped human interest stories from around the world, helping our readers to stay informed on the latest developments around the globe. Our Coverage Areas 1. Companies: Comprehensive news and analysis on listed and unlisted companies, corporate announcements, corporate chatter, C-suite, business trends, hiring alerts, layoffs, work-life balance, world's top billionaires and richest and more. 2. Personal finance: Insights into mutual funds, small savings schemes like - PPF, SSY, post office savings scheme, stock to watch, personal loans, credit cards, top bank FDs, real estate, income tax and more. 3. Politics: Comprehensive coverage of general elections, state elections and bypolls, Lok Sabha, Vidhan Sabha, Parliament, PMO, PIB, finance ministry, home ministry, among other union ministries and government departments. 4. National News: From metro cities like Delhi, Mumbai, and e to untapped stories from rural India, we cover human interest, health, education, crime and courts, and law and order, among other areas of public interest. 5. Economy: In-depth analysis of India's macro and micro-economic indicators like- GDP, inflation, forex, fiscal deficit, current account deficit, interest rate cycle, economic recovery, RBI circulars, indirect taxes, GST, Insolvency and Bankruptcy imports, exports and everything that impacts Indian economy. 6. Geopolitics: Well-rounded and deeply researched coverage on US News, Oval Office European Union, Ukraine Russia War, middle-east crisis, royal families and global leaders like - Donald Trump, Vladimir Putin, Kim Jong Un, Xi Jinping and premiers of other leading economies in the world. Meet the Team 1. Gulam Jeelani, Political Affairs Editor 2. Sugam Singhal, Senior Assistant Editor 3. Chanchal, Assistant Editor 4. Sanchari Ghosh, Chief Content Producer 5. Pratik Prashant Mukane, Chief Content Producer 6. Sayantani Biswas, Chief Content Producer 7. Ravi Hari, Deputy Chief Content Producer 8. Garvit Bhirani, Deputy Chief Content Producer 9. Akriti Anand, Senior Content Producer 10. Jocelyn Felix Fernandes, Senior Content Producer 11. Swastika Das Sharma, Content Producer 12. Mausam Jha, Content Producer 13. Riya R Alex, Trainee Content Producer
Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More
✕
Wait for it…
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.