Egon Zehnder to help bank find Puri’s successor
HDFC Bank will retain global executive search firm Egon Zehnder to find a successor to Managing Director Aditya Puri, four sources familiar with the matter said, as its board seeks to end an impasse and zero in on a candidate.
“Egon Zehnder has been recommended by the search committee and unanimously appointed by the bank’s board,” Neeraj Jha, a spokesman for HDFC Bank, said in an email, confirming a Reuters report on the matter from earlier on Thursday.
Four sources familiar with the discussions told Reuters that a six-member internal search committee, appointed in November last year, has been unable to reach a consensus on selecting a successor to Puri, who has been at the helm of the country's largest private lender since its inception in 1994.
Puri, whose term comes to an end in October this year, is also an advisor to the search committee tasked with identifying a suitable candidate. “The decision to hire a global advisory firm has been taken after the search committee members realised that they have been struggling to come to a consensus on the final name,” said a source. “The deadline for Puri's successor is nearing ... the bank will have to appoint someone who can continue to push for growth despite an economic slowdown,” it added.
According to regulations, the bank will need to get approval from the RBI, before any new appointment can be confirmed. HDFC Bank is one of three domestic lenders that the RBI has designated as “too big to fail”.
Egon Zehnder, which declined to comment on the matter, had in 2018 also helped Axis Bank, another private lender, to find its chief executive officer. A second source at HDFC said the differences between the top leadership over the succession had been the crucial reason for the delay in identifying a new MD.
The sources said Puri and Deepak Parekh who is the chairman of HDFC, which owns a minority stake in the bank, have been at loggerheads over the bank's succession plan, with both advocating their preferred candidates to secure the job.
Puri’s choices include HDFC’S executive directors Bhavesh Zaveri, Sashidhar Jagdishan and Kaizad Bharucha, said three of the sources. Two of those sources also said Parekh has been rooting to reinstate Paresh Sukhtankar, who resigned as Puri's deputy in 2018. Sukhtankar who joined the bank alongside Puri in 1994 was widely expected to be Puri's successor. Reasons behind his departure remain unclear.