Equitas Small Finance Bank Managing Director and Chief Executive Officer PN Vasudevan resigned on Thursday, citing persistent investor concerns over a perceived conflict of interest involving his daughter's association with a non-banking financial company (NBFC).
The resignation came barely three months after the bank's board extended his tenure until July 2029.
In his resignation letter, Vasudevan said investors had repeatedly questioned his position at Equitas alongside his daughter's role as co-promoter of an NBFC.
He maintained that both associations complied with banking regulations and had been disclosed to the bank's board and the Reserve Bank of India (RBI).
According to Vasudevan, his daughter's company received its RBI licence in 2023.
He clarified that there were no ongoing financial transactions between the entities.
The only previous transaction involved a short-term deposit placed approximately two-and-a-half years ago, which was repaid upon maturity.
Vasudevan said no lending arrangements existed between the companies.
"Sometimes perceptions are stronger than reality," he wrote, explaining that investor concerns had continued despite repeated clarifications.
He said the perceived conflict had affected the bank's share performance and shareholder value.
The bank's board acknowledged Vasudevan's resignation and requested him to continue until a successor assumes charge.
Its nomination and remuneration committee will evaluate internal and external candidates, subject to regulatory approvals.
Vasudevan established Equitas as a microfinance institution in 2007 and oversaw its transformation into a small finance bank in 2016.
Before founding Equitas, he worked at Cholamandalam for two decades and subsequently joined DCB Bank.
After nearly 20 years with Equitas, Vasudevan said he intended to take a break and build a corpus for a trust serving another section of society.
