The government has extended the term of Kotak Mahindra Bank managing director Uday Kotak as the non-executive chairman of the IL&FS group by six months by means of April 2, 2022.
In a gazette notification, the Department of Financial Services stated: “…whereas the Central government, on the recommendations of the Reserve Bank of India, has considered it necessary to grant said exemption to Kotak Mahindra Bank Limited for a further period of six months with effect from the 3rd day of October, 2021.”
According to the Banking Regulation Act, a bank can not be managed by any individual who is a director of any other firm. He can be granted a short-term exception for 3 months or nine months with the approval of the RBI.
The Centre had appointed Kotak as the head of the lender’s board in 2018 to aid the debt-laden firm come out of tension, just after the government took more than the board. He was initially permitted to be at the helm of IL&FS for 3 months, which was extended by nine months. Subsequently, he got two extensions of one year every.
CS Rajan, managing director of IL& FS, hailed the move and stated beneath Kotak’s continued leadership, IL&FS will achieve the resolution targets.
In reality, following the Evergrande crisis in China, Kotak had tweeted on September 21 that the problems at the house developer appears like China’s Lehman moment and reminds him of IL&FS.
He tweeted: “Indian Government acted swiftly. Provided calm to financial markets. The Government appointed board estimates 61% recovery at IL&FS.”