Days after the Reserve Bank of India (RBI) asked the board of the Axis Bank to reconsider their decision to extend the tenure of Shikha Sharma, MD and CEO of the private bank, Sharma, an ex ICICI banker, seems to have looked for an honourable exit.
This former ICICI banker, who also did insurance for more than a decade before taking up the banking job, has requested the board to reconsider the period of her re-appointment as the MD & CEO for a period of six months from June 01, 2018 to December 2018. Her original extension was for a three year period starting June 2018 to June 2021.
The senior most senior management executives in the bank are V Srinivasan, Deputy MD, who comes with a corporate background. Rajiv Anand, Executive Director has done extensive retail banking. Rajesh Dahiya is the executive director (Corporate Centre), which has a human resource background. Will it be an outsider for the top job or an insider, this will be a key question as the board earlier bated for continuity.
The bank has been in the news for the last 2-3 years for all the wrong reasons. There was a spike in the bank's NPAs in the last few years. While it was partly because of the slowdown in the economy and key infrastructure sector not doing well, the bank saw a huge rise in its gross NPAs as compared to other banks. Axis Bank was the first to slip amongst the private bank, though other banks like ICICI Bank joined in later. The net NPAs were at 2.31 per cent in 2016-17. The gross divergence in NPAs were at 129.06 per cent in the same period.
The bank is the seventh largest bank with a balance sheet of Rs 6 lakh crore plus. In fact, there was a talk of merger with Kotak Bank because of the rising NPAs in its book.
Sharma was a veteran ICICI banker having worked in the project department to various other division of the erstwhile development financial institution ICICI Ltd. She was later given the task of setting up insurance venture ICICI Prudential Life Insurance Ltd. Sharma was actually among the top two contenders at the ICICI Bank to succeed KV Kamath. But when the baton was passed to Chanda Kochhar, who is also in the eye of storm, Sharma left the ICICI Group to join Axis Bank.
At Axis, Sharma got the very good platform of a private bank with public sector characteristics as most of its employees came from State Bank of Bikaner and Jaipur, a SBI associate bank, which has been merged with the parent SBI last year. Axis Bank, which was earlier managed by PJ Nayak, was the most consistent bank in terms of performance.
Sharma built on the platform created by Nayak. Sharma actually took big bets in the infrastructure sector. Share also played a key role in the retail initiatives at the bank. In fact , she was also very quick on the digitization front. But the bank was consistently mired in controversies. The higher NPAs and provisioning impacted its profitability. During demonetization days, the bank's name often cropped up for all the wrong reasons. A year ago, there was also a talk of replacing Sharma.