If history repeats, Manian will adorn Federal Bank’s top post

Kerala-based banks seem to be averse to internal recruitment

KOCHI: Speculation is rife about who will be the new MD & CEO of Federal Bank.

This follows the submission of three shortlisted names to the Reserve Bank of India (RBI) for its consideration – KVS Manian, former deputy MD of Kotak Mahindra Bank, and Shalini Warrier and Harsh Dugar, both executive directors of the bank (Federal) and internal candidates.

If history characterised by the Kerala-based banks repeats itself, former Kotak man, Manian, will secure the post hands down.

And there’s more reason to buy this theory – that Manian who was re-designated as the joint MD of Kotak Mahindra Bank on March 1, 2024, stepped down from his post with immediate effect on April 30, when rumours in connection with the new MD & CEO of Federal Bank have been doing the (brisk) rounds.

A stock taking of the processes led to the selection of MD & CEO of the banks headquartered in the state reveals that never in the recent history of these banks, an internal candidate has been elevated to fill the top post in their own bank. 

Just a formality

That post has invariably gone to the ‘imported’ candidate, and the internal names sent from these banks for the consideration of RBI have always proved to be part of a set formality, arguably to avoid an uncertainty just in case the selection of external candidate somehow fails to work.

Speaking to businessbenchmark.news from New York, T.S. Ananatharaman, the former chairman of CSB Bank, also shared the view that Kerala-based banks have an aversion to promoting their own employees to key positions.

“I am really surprised why these banks can’t recognise their own talents within the bank. To me, if the management can identify talented employees from their own bank, that will serve a much better purpose than importing from outside,” Anantharaman added.

Federal Bank

Let’s see where the former CEOs of these banks have come from.

The outgoing MD & CEO of Federal Bank is Shyam Srinivasan. Before joining Federal Bank in September 2010, Shyam Srinivasan was with Standard Chartered Bank. He had a long tenure at Standard Chartered, where he held various leadership roles, including serving as the Head of Consumer Banking for India, the Middle East, and Africa (MEA).

The predecessor of Srinivasan was M. Venugopalan, who had come from Bank of India (BOI) , where he served as the chairman of the bank before joining Federal Bank. Venugopalan had taken over from K.P. Padmakumar who had a long stint with the State Bank of India (SBI), the largest public sector bank in the country, prior to his Federal Bank assignment.

South Indian Bank

The Thrissur-headquartered South Indian Bank (SIB) too witnessed quite a number of CEOs filling the post from outside, slipping past the internal runners for the post.

The current MD & CEO of SIB is P.R. Seshadri, who has come from Karur Vysya Bank (KVB). The one previous to him was Murali Ramakrishnan, who had served in key positions in ICICI Bank. Ramakrishnan had a successful tenure with SIB from October 1, 2020, till September 30, 2023.

And immediate predecessors of Murali Ramakrishnan were V.G. Mathew, who is a former SBI veteran, V.A. Joseph from Syndicate Bank and A. Sethumadhavan who was with Corporation Bank prior to taking over as MD & CEO of SIB.

In many cases, before filling the top post, these officials were invited to serve in other key posts in the bank for a small period in order to familiarise themselves with the bank’s operations.

CSB Bank

It was due to the unexpected voluntary retirement of CV R Rajendran from the top post on health grounds, the current MD & CEO, Pralay  Mondal took over as the head of CSB Bank. CV R Rajendran was reportedly picked from Andhra Bank by the Canada-based Fairfax group to prepare the ground for the Canada group to buy in a majority stake in CSB Bank, which was done with the special approval from the RBI in 2018.

The predecessors of Rajendran were Anand Krishnamurthy and Rakesh Bhatia in the same order, both from HSBC.

Dhanlaxmi Bank

The latest protagonist in this series is the current MD & CEO of Dhanlaxmi Bank, Ajith Kumar K.K., again an ex-Federal Banker, who used to head its HR Department. Kumar replaced Sivan J.K. who came from SBI where he had a long stint in different positions.

To cut a long story short, Sivan’s predecessors were Sunil Gurbaxani who came from Axis Bank and T. Latha who served for a relatively short period with Dhanlaxmi in 2021, after abdicating a key post with Punjab National Bank (PNB).