The Reserve Bank has given its go-ahead to Ujjivan Small Finance Bank (SFB) to form a special committee of directors to oversee operations in the absence of an MD and CEO.
The Reserve Bank of India (RBI) in a letter dated September 15, 2021, has approved the constitution of ‘Special Committee of Directors’ with three independent directors as its members, Ujjivan SFB said in a regulatory filing on Thursday.
The committee will “oversee the operations and administration of the bank in the absence of the Managing Director and CEO with effect from September 16, 2021,” it said.
Last month, the Bengaluru-based company had appointed old hand Carol Furtado to take charge as officer on special duty (OSD) till September 30, 2021, following the resignation of Nitin Chugh as MD and CEO.
She will take charge as the interim CEO from October.
“The board of Ujjivan SFB, in parallel, will evaluate suitable candidates for the MD & CEO position, and submit two names to RBI for approval,” the lender had said.
Furtado has been associated with Ujjivan SFB since inception and has spearheaded the organisation on numerous occasions, playing critical roles.
She is the head of operations of the bank.
Ujjivan SFB, which began operations from February 2017, recently saw some top-level exits amid high level of bad assets and management issues, among others.
The lender’s overall recognised stressed pool stands at 15.6 per cent of the loan book. This includes gross non-performing assets of 9.8 per cent and restructured loans of 5.8 per cent.
Also, the portfolio-at-risk has swelled to 30 per cent as of June 2021.
The bank’s early-stage strategy to mobilise deposits from microfinance customers, higher dependence on the vulnerable microfinance business, among others, have led to the current troubles, according to experts.
Ujjivan SFB stock closed at Rs 20.60 apiece on BSE, up 1.23 per cent from the previous close.
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