IndusInd Bank begins hunt for Sobti successor; to see 3 internal candidates

The search for a successor to Romesh Sobti at IndusInd Bank will see three internal candidates vying for the top job apart from outsiders. 

The three IndusInd hands who are said to be in the fray to gain control of the corner-room are Paul Abraham, the current the chief operating officer, Sumant Kathpalia, the lender’s head of consumer banking, and Suhail Chander, head of corporate and commercial banking. The bank’s board will also look outside the internal pool for filling the position. 

If all goes according to plan, a successor will be announced “sometime in the middle of next year”, said a source. 

Sobti’s term as managing director (MD) and chief executive officer (CEO) comes to an end in March 2020, when he turns 70. 

According to extant regulation, one has to step down on reaching that age. 

The upcoming succession throws up myriad challenges, as unlike other private banks, the dynamics of the core team in IndusInd Bank is unique. 

The three internal candidates, as the rest of the 15-strong core team barring two, are from ABN AMRO Bank. The three walked in when the Hindujas dialed Sobti in 2007 to take charge. Sobti had put forward a case that his senior colleagues at the foreign bank, too, would come on board. The promoters were more than willing to oblige, as the bank had been largely adrift since its inception in 1993 under three bosses — Soloman Raj, K R Maheshwari, and Bhaskar Ghose. Even two years after Sobti took over, a Reserve Bank of India draft paper on new bank licence in October 2009 alluded to IndusInd’s status without making a direct reference to it with the words “… one bank, has just about survived”. 

No other bank in the country has almost its entire top brass so closely associated with its helmsman throughout the larger part of their careers; and it is not certain if the team will hold together in case one among them was to step into Sobti’s shoes. It is a concern, which was flagged in 2014 by analysts when his tenure was extended by a year. 

He was to turn 65 (in 2015), which was the retirement age then for the heads of private banks. A year’s extension was given as then in-the-works P J Nayak Committee on governance in banks had initially deliberated on 65 as the age limit for bank CEOs. It was later decided to go by the Companies Act and the limit was extended to 70. 

Will the team hold together? The answer to the question may be blowing in the wind, as speculation is rife that both Sobti and his counterpart at HDFC Bank’s Aditya Puri may become chairman of their banks at some stage. In the past, both Narayan Vaghul and K V Kamath had taken up such role at ICICI Bank after their stints in the CEO’s room.