Shares of AU SFB come under pressure amid top-level resignations

Shares of Jaipur-based private lender AU Small Finance Bank tumbled on Tuesday in a rising market, following early morning reports of another top-level exit from the bank, that of Sumit Dhir, its head of Internal Audit. The scrip closed at ~1,130.75 on the BSE, down 12.62 per cent from the previous day’s close.

In an exchange notification, post market hours, the bank clarified that Dhir has expressed his intention to move back to his hometown due to changes in his personal circumstances following the second wave of Covid. However, he continues to be on the rolls of the bank as the head of internal audit and the bank is in discussions with him for possible retention.

Dhir replaced Nitin Gupta, who was the chief audit officer of the bank, and was reporting directly to the CEO. Gupta had stepped down from his position in March.

In an exchange notification a day earlier, the bank informed that Deepak Jain, who was serving as chief operating officer (COO) and key management personnel, has been appointed chief risk officer (CRO) of the bank for a period of three years, effective September 1. He replaces Alok Gupta, who resigned in July, citing personal reasons.

Amid reports of attrition of top-level executives, the bank has clarified that there is not a single other resignation in the top-50 senior management team or the board of directors.

“The senior management team (top-50) has an average vintage of ~6.5 years with AU and remains very excited around our journey to create a leading banking franchise. Some challenges remain around Jaipur location which we are addressing by scaling up Mumbai and other regional offices at key cities (like Delhi,

Pune, Indore, Chandigarh etc)”, the bank said.

A senior official with the bank said employees who resigned recently did so because of personal reasons. “The employees, who resigned, came from Mumbai and may have found it difficult to adjust in Jaipur. The bank is in a growth phase and hired more than 100 in senior positions. It is in good stead,” said the official.

“As the largest small finance bank, AU has successfully attracted talent over the last 12-18 months. During this period, the Bank strengthened its senior management team with ~100 hires at senior positions”, the bank said.

In its annual report for 2020-21, Sanjay Agarwal, MD & CEO of AU Small Finance Bank, said: “A recent incident regarding the change of hands in the position of head of internal audit this year reiterated the importance of effective communication. We have learnt a lot from that incident and are working to go beyond the illusion.”