Chennai: Outgoing MD & CEO of Equitas Small Finance Bank (SFB), P N Vasudevan, said his departure was in the bank’s interest, as investors wanted to remove the “overhang” of perceived conflict of interest arising from his daughter’s role as co-promoter of another housing finance company (HFC)-NBFC.Vasudevan is stepping down as the bank prepares to apply for a universal banking licence and reports its highest quarterly profit after tax (PAT) of Rs 218 crore for Q2 of this fiscal. Its total business also crossed Rs 1 lakh crore during the period.“The perception of overhang has remained high. A lot of investors have been telling me that I will have to one day remove this overhang. Only then will there be more interest in the stock, and the valuation can improve for all stakeholders. After a lot of discussions, we thought this was the best time to do it,” he told TOI on Monday.He tendered his resignation on Thursday, his second in four years, having stepped down in 2022 as well.“Last time, the reason that I wanted to leave was something to do with me personally. But, this time, my reason for wanting to leave is for the interest of the bank,” he added.Vasudevan founded Equitas Microfinance in 2007, which became an SFB in 2016. He initially held a 20% stake in the microfinance company but diluted it to 5% within a year. In 2023, his daughter sold a 1.5% stake in Equitas SFB and invested in Unico Housing Finance, an HFC-NBFC launched that year, where she holds about 65%.According to Vasudevan, the objective behind investing in the new HFC is to create a corpus for a trust run by the family that operates a home for abandoned and surrendered babies, assisting special children born in low-income families. Currently, Vasudevan, his wife and daughter, hardly owns a minuscule of 0.1% stake with Equitas SFB.“There is no conflict of interest in me being the MD and CEO of Equitas and my daughter is a co-promoter of another NBFC. It is allowed as per RBI guidelines and Banking Regulation Act. That‘s why RBI continues to give me approval for extension,” Vasudevan, who led the SFB for more than a decade, said. In June, the bank’s board approved his reappointment for three years till June 2029.Asked whether he would join Unico Housing Finance, Vasudevan said: “I will figure out what to do with my life once I am out of the bank. Right now, my entire focus is on running the SFB properly and handing it over smoothly to my successor.”Meanwhile, Equitas SFB is preparing to apply for a universal banking license, having met key eligibility criteria, including maintaining net NPAs below 1% for two consecutive years.“We are discussing with the RBI to determine the right time to apply. We will apply when we feel the time is right,” he said.
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