Kotak Mahindra Bank informed the stock exchanges late Tuesday that it had accepted Manian’s resignation with immediate effect, stating that he had “stepped down to pursue other opportunities in the financial services sector”.

It appears, however, that Manian, 62, who has spent nearly three decades at the bank and had been in consideration for the top role, may not have anticipated having to leave immediately. 

Manian’s exit comes at a time when Kotak Mahindra Bank is scrambling to get its credit card operations back on its feet following the Reserve Bank of India’s censure and just as the lender was settling in under its chief, Ashok Vaswani.

On Tuesday, the bank’s board held a 30-minute meeting on Manian’s exit following which it accepted his resignation with immediate effect, according to its stock exchange notification. The board is expected to meet in four days to consider the lender’s fourth-quarter and full-year financial results.

There has been speculation that Manian had concerns about his new role at Kotak Mahindra Bank, and that he was in the running to lead another lender. His resignation at this moment, however, has come as a shock to banking industry insiders, especially as the Reserve Bank of India hasn’t confirmed his name for another position, say people familiar with the developments.

Manian did not respond to calls and text messages from Mint. Kotak Mahindra Bank did not reply to emailed queries.

A quick transition

Manian in his resignation letter indicates he was willing to serve a notice period. “I’m happy to help and facilitate the transition in a manner that you feel comfortable with. Accordingly, do let me know the date by which I can be relieved,” Manian said in the letter, available as part of the bank’s regulatory filing.

Last week, RBI barred Kotak Mahindra Bank from onboarding new customers through its website or mobile app, and restricted it from issuing fresh credit cards citing “serious deficiencies” in its technology system.

While RBI’s action may not have had a bearing on Manian’s exit, Kotak Mahindra Bank has announced a new reporting structure, its second since February. 

The wholesale, commercial and private bank businesses, which Manian was heading, will now directly report to the bank’s new managing director and chief executive Ashok Vaswani.

The asset reconstruction division will report to deputy managing director Shanti Ekambaram, who will also oversee the investment banking and institutional equities businesses. Ekambaram, who also has about 30 years at the bank, was named deputy managing director in February as part of a restructuring under Vaswani, who took charge on 1 January.

A loyalist’s exit

For Manian, founder Uday Kotak’s trusted aide and long-term loyalist, an exit from Kotak Mahindra Bank may have been in the works for sometime, according to media reports. 

NDTV Profit reported in February that Manian was being considered, among others, for the CEO’s position at Federal Bank once incumbent Shyam Srinivasan steps down in September. The two other names likely to be considered are Federal Bank’s executive directors Shalini Warrier and Harsh Dugar.

That said, Federal Bank is yet to officially send the names of potential candidates for its CEO role to RBI, according to a banker who spoke on condition of anonymity. Typically, the regulator takes 2-3 months to approve a candidate.

“Unless Manian has received an informal assurance from the bank or RBI, it doesn’t make sense for him to resign so soon,” said a Kotak Mahindra Bank executive.

Another banker said the news of Manian’s sudden exit from Kotak Mahindra Bank has come as a shock. 

“Manian was not happy being No:2, and he believes he could work for some more time. Asking somebody like Manian to leave immediately is not akin to Kotak’s culture; it is similar to a foreign bank,” said this banker. “That said, the board must have thought from a governance perspective that it is better to ask him to leave if he is joining competition.”

“Manian was also in the running for Axis Bank CEO in 2019. Clearly, he had aspirations to become a CEO,” said another banker who has worked with Manian. “It was after that that Uday made him a whole-time board member.”

In February, shortly after taking charge, Vaswani announced a leadership reshuffle, elevating Manian as joint managing director and Ekambaram as deputy managing director. This was seen as a move to arrest senior management attrition following the resignation of Uday Kotak last year.

Uday Kotak had stepped down in September, four months before the end of his term, because of the central bank’s regulation capping the tenure of a private sector bank’s MD and CEO at 15 years.

Manian initially had been considered the frontrunner to replace Uday Kotak as the CEO. The RBI, however, decided to go with Vaswani, a global banker with experience at Barclays Plc in the UK and Citigroup in the Asia-Pacific region.