Can you give us your perspective Nitin Chugh’s departure? Under the backdrop of a lot of earlier exits, your shareholders are bit worried.
Frankly yes, the timing of Nitin’s departure also came as a little bit of a surprise to us. But we faced very challenging times over the last one year and there is a lot of pressure on the management; specially the last quarter results were also very poor. I think all this added together. Nitin decided that he needs to take a time off and frankly, that came as a surprise to us also.
But this gives us an opportunity to rebuild Ujjivan the way we envisage and we are working on that. We have been also working on strengthening the board of the bank significantly for last few months. We are pleased to inform you that Mr Nambiar ex-CMD of Andhra Bank is going to join the board and we are going to nominate him for the Chair of the board.
I have the holding company, which owns 83% of Ujjivan Small Finance Bank, and has nominated me to be a common director specifically to look at the portfolio quality issues and high attrition which has been taking place in the last six months, specially of people who built Ujjivan. We want to make sure that we put a stop to that and rebuild that. Finally, I would be working very closely for the reverse merger process which will require close coordination between the holding company and the bank.
There is a concern in the mind of shareholders that the new management and the old management had some difference of opinions. Would you like to dispel that?
No, I do not think there was any old management, new management, anything to do with that. But certainly, the holding company of which I am the chairman, and we have a lot of our directors from early times – Ramamoorthy, Sunil Patel, Abhijit Sen, etc. They have been very concerned about the portfolio quality problems for last one year. It is not a personal issue or a management issue anything.
It is not that we forced Nitin to resign, that was his personal decision. As I told you, it came as a surprise to us also. I do not think that is an issue, but certainly we were very concerned over two issues. One is the portfolio quality problem and how it is being managed because we have always been a very conservative organisation. We have been upfront or recognised all our problems and try to resolve all that.
Secondly there has been a high level of attrition among a lot of our people who are business leaders over the last six months to a year in Ujjivan. We were very concerned about that because these people are the ones who built Ujjivan. So, it is not a question of any personality conflict or anything like that. These were certainly our areas of concern.
Could you speak a bit more on the quarter gone by?
I mean in last quarter Ujjivan took a lot of provision and consequently had a big loss, but this quarter also we have to see. It may be a very challenging quarter, so we may have to take additional provisions. But one thing we want to make sure is that we clean up our books and following quarter onwards we start performing very well. This current quarter may be a big challenge; we have to see that.