Having right people on the board is critical to the bank's success: Surrinder Kapur

Interview with former non-executive chairman, YES Bank

Surrinder L Kapur served on the YES Bank board for eight years - from January 2005 to January 2013 - the last five as chairman. In 2009, he chaired the board meeting that rejected Madhu Kapur's (widow of the bank's co-founder Ashok Kapur) proposal to induct her as board member. In an interview with Somasroy Chakraborty, he talks about the ongoing dispute between the bank's promoters. Edited excerpts:

Ashok Kapur's family claims in 2009, no formal application was made to YES Bank to consider the appointment of Madhu Kapur on the board. If this was the case, how did the bank's board discuss and reject the proposal?
  In November 2008, Ashok died under tragic circumstances. The board members knew his family. Madhu had met all the board members and made a request. I don't remember if a formal application was made, but the proposal was certainly discussed by the board. I remember it clearly, as I had chaired that meeting. We reviewed the criteria mentioned by the Reserve Bank of India (RBI) on the appointment of directors and felt she didn't meet the fit and proper criteria.

Why was Madhu Kapur was not considered fit to join the board?

The board members have years and years of experience in their respective fields. RBI (Reserve Bank of India) has always said only eminent people should be considered for the board. What I understood from my meetings with the RBI governor was the central bank wanted board members who would represent a specific sector and guide the bank in providing financial services to that sector. We felt Madhu wasn't eligible. When the bank's appointment committee refers someone, the board discusses it in detail. The objective is to have the right people, with rich experience and expertise. That was the process we followed when Ashok was alive and after his death, too, there was no deviation. Having right people on the board is critical to the success of the bank.

It has been alleged the names of Ashok Kapur and his legal heir, Madhu Kapur, were removed from the list of promoters and major shareholders in the bank's recent annual reports.
I don't remember clearly if the names were removed and whether there was any particular reason. But till 2012, I had attended all the annual general meetings of the bank, and nobody ever raised this issue.

According to the articles of association, both promoters of YES Bank must jointly nominate directors to the board. Ashok Kapur's family claims it wasn't consulted on director appointments. Why?
All I know is the appointment committee recommended the names of three directors (Diwan Arun Nanda, Ravish Chopra and M R Srinivasan). We saw their profiles and decided to go ahead with the appointments because of their excellent track records.

Currently, the YES Bank board has only seven members, including co-founder Rana Kapoor. Do you think the board is lean and should expand to manage the bank's growing businesses?
You need to find the right persons first. A small board has never been a problem for YES Bank, as is evident from the growth it has seen since its inception.

Is Shagun Kapur Gogia (daughter of Madhu Kapur) eligible to be a board member?
The board has said it would consider her appointment in its next meeting (June 27). I wouldn't be able to comment on whether she is eligible, as I haven't seen her biodata.