EXECUTIVE SUMMARY. In a highly reassuring development, Indusind Bank has stated to this writer that its board of directors
“has not considered any proposal to appoint Mr Sobti in any capacity post his retirement as MD [Managing Director] and CEO [Chief Executive Officer].”
Stakeholders may recall that at a joint interview to the Economic Times on March 20, 2020, both Romesh Sobti and Sumant Kathpalia (the present CEO) had stated that the board of directors would finalise a “non-executive and mentorship” role for the former in a “few days”. Fortunately for stakeholders, the board of directors shelved such an ill-advised sinecure for an individual who was responsible for many of the excesses of poor quality loans and misreported financial accounts that plagued the bank.
In response to the interview, this writer on March 22, 2020 had strongly cautioned against Sobti’s engagement with Indusind Bank and its management post his retirement. When a new broom is required to clear out all the cobwebs of the past, it is inappropriate for the previous incumbent to be present in the vicinity and it is commendable that the board of directors has emphatically shut the door on Sobti.
It remains a mystery why both Sobti and Kathpalia publicly commented on the former’s mentorship role post retirement in Indusind Bank. Either the board of directors had not been taken into confidence or Indusind Bank was not confident that the Reserve Bank of India would approve of Sobti’s new avatar.
The bank’s share price has rebounded since Kathpalia took charge, as shareholders have become more confident, and on account of investors committing to a capital raising. Although the future is still marred by many ills of the past, it is a positive development that Sobti will no longer have any role in Indusind Bank.