The Axis Bank board has approved CEO Shikha Sharma's request to re-appoint her for a six month period from June 1 to December 31, a week after the Reserve Bank of India (RBI) objected to the decision to give her a fourth three-year-long term.
The Axis Bank board has approved CEO Shikha Sharma’s request to re-appoint her for a six month period from June 1 to December 31, a week after the Reserve Bank of India (RBI) objected to the decision to give her a three-year-long fourth term. Reuters reported that it was Shikha Sharma who asked the board to reconsider the period of her re-appointment as bank chief. While the board has accepted her request, the approval from the central bank is pending.
The RBI earlier this month had asked Axis Bank’s board to reconsider the decision to re-appoint Shikha Sharma as its managing director and chief executive officer (CEO) for a fourth term, amid concerns over rising bad loans. Last year in July, seeking an end to speculations, Axis Bank had re-appointed Shikha Sharma as the managing director and chief executive of the third largest private lender for a fourth term until June 2021.
However, last week the RBI asked the bank to reconsider the decision of granting a three-year-long fourth term to Shikha Sharma, which has come against the backdrop of persisting concerns over mounting non-performing assets (NPAs) in the banking system. The RBI in its letter to Axis Bank’s board flagged concerns over deteriorating asset quality condition over the years.
While the board has approved for a 6-month-long fourth term for Sikha Sharma, as per regulations, RBI’s clearance is mandatory for the appointments of top management personnel at private sector banks. Axis Bank’s NPAs jumped by over five-fold in recent financial years. The gross NPAs worth Rs4,110 crore at the end of March 2015 surged to Rs21,280 crore at the end of March 2017. In fact, the bank was even penalised for incorrectly reporting bad loans by the RBI.