Indian bourses welcome move to curb Axis Bank chief’s term
The Reserve Bank of India refused to approve Shikha Sharma's fourth three-year term as CEO and managing director, amid concerns over rising bad loans
The curtailment of the tenure of Shikha Sharma, the managing director and chief executive officer of Axis Bank, India’s third-largest private-sector lender, has been welcomed by the country’s stock markets.
Shares of Axis Bank on Tuesday rose as much as 4% in morning trade. At the Bombay Stock Exchange the shares opened on a bullish note at 523.10 rupees (US$8.05), then surged to a high of 540 rupees, up 4.26% from Axis’ previous closing price of 517 rupees.
On the National Stock Exchange, the stock opened at 523 rupees, then jumped to a high of 540 rupees, a rise of 3.98% from its last close of 533.53 rupees, The Times of India reported.
The troubled bank had to cut short Sharma’s tenure after the Reserve Bank of India (RBI) refused to approve the Axis Bank board’s proposal to grant her a fourth three-year term. The regulator was reportedly concerns over rising bad loans at the bank.
Sharma, whose next three-year term was to start from June 1, has now offered to stay on until December to ensure a smooth transition to new leadership. She had joined Axis Bank in 2009 after heading ICICI Prudential Life Insurance.
In the last three years the non-performing assets of Axis Bank rose by more than 300%. Total NPAs rose from 11.73 billion rupees at the end of December 2009 to 250 billion rupees at the end of December 2017. The gross NPA ratio, which was 1.23% in December 2010, is now 5.28%.
Axis Bank is also being investigated by the Securities and Exchange Board of India over an the alleged leak of its June 2017 quarterly results on WhatsApp.