HSBC CEO Kidwai could resign from Nestle board

Naina Lal Kidwai, appointed CEO of HSBC India in May, is likely to step down as a director from the board of Nestle SA, following a RBI communication to the bank that she cannot continue to hold both the posts.

The RBI communication to the bank seems to stem from the fact that Nestle SA has an Indian subsidiary and Kidwai, being on the board of Nestle SA, could give rise to conflict of interests, if the bank were to lend to Nestle or its Indian subsidiary.

A RBI spokesperson refused to comment on the matter. However, the banking industry sources aver that the apex bank has taken this step in the interest of maintaining highest standards of corporate governance.

A HSBC spokesperson, however, said that "HSBC has always complied with the regulators wherever it operates. In India too, our compliance is of the highest order and we will comply with all regulatory requirements."

Indications are that Kidwai may quit the Nestle SA board in order to comply with RBI's requirements.

Kidwai, who took over from Niall Booker as CEO on May 5 this year, was appointed director on Nestle SA's Board in April, a month before being appointed the CEO of HSBC India.