“Nitin Chugh’s resignation has come as a surprise,” Ujjivan’s founder and non-executive chairman of the holding company Samit Ghosh told ET. “In fact, it’s a matter of concern that several people of the leadership team, which we built over the past 16 years, have left,” he said.
Ghosh is slated to join the bank board as an additional director (non-executive, non-independent) with effect from August 20, and he shall hold office till the bank’s annual general meeting.
After that, Ghosh is slated to become the common director at both the bank and holding company.
Over the past one year or so, several senior people such as
Furtado, Abhiroop Chatterjee, Rajat Singh, Sneh Thakur and Manish Kumar have 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 board to guide in this scenario as well as to help with the process of reverse merger. The transition to a new chief executive will now be another challenge,” Ghosh said.
The bank’s gross non-performing assets ratio jumped to 9.8% at the end of June 30, 2021 from merely 1% a year back. Although every lender with microfinance focus has been facing stress amid pandemic, it requires special attention and planning to recover the loans from the field. Chugh’s surprise resignation at this juncture makes the situation grim.
The Reserve Bank of India has in-principle allowed the reverse merger of holding companies with small finance banks. Ujjivan has proposed to apply for the same around October this year. It will complete five years on Jan 31, 2022.
Meanwhile the bank’s board also appointed former Andhra Bank chairman BA Prabhakar as another additional director and designated him as the future chairman of the bank. Non-executive chairman B Mahapatra, who was a former Reserve Bank of India executive director, also resigned in February after a short 10-month stint. He had been on the bank’s board as independent director since 2017.