Post RBI directive, Axis Bank chief Shikha Sharma's term cut short

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Mumbai: Shares of Axis Bank Ltd, India's third largest private lender, on Tuesday gained over 5% after its managing director and chief executive officer Shikha Sharma chose to leave at the end of the year.

In a late evening notification to the stock exchanges, the private sector bank noted that Sharma had requested her board to "reconsider the period of her re-appointment as managing director and CEO of the bank be revised from 1st June 2018 up to 31st December 2018".

The board has accepted her request and it is subject to approval from the Reserve Bank of India (RBI).

Speculations have been rife on Axis Bank's Board was seeking a successor to Sharma but an early re-appointment announcement by the bank past year dashed the rumours of a leadership change in the bank. The board of the third largest private sector lender, which had earlier approved a three year extension to Sharma, has accepted her request to cut short her stint.

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Ms Sharma, who traces her roots to ICICI Bank, took over as the chief executive of the bank in June 2009.

Sharma, one of India's most celebrated women bankers, joined Axis Bank in 2009 and is credited with transforming the lender that was previously known as UTI Bank.

Shikha Sharma took over as the chief of Axis Bank in June 2009 from banking veteran P.J. Nayak, despite some reservations from the outgoing chief who preferred that an internal candidate as his successor.

The stock of Axis Bank's NPAs remained elevated, as bad loans assessed by RBI differed from those reported by the bank.

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Last month, Axis Bank was also penalised by the central bank for non-compliance of income recognition and asset classification norms. It may be noted that by the end of December 2016, the total bad loans for Axis Bank stood at a staggering Rs 20,466 crore as against just over Rs 5,000 crore a year before.

Over the last two years, the bank came under greater scrutiny of the RBI for providing incorrect details on distressed assets. In the quarter ended September, the bank said the RBI found divergence of ₹5,630 crore of bad loans of the previous fiscal. However, it apparently ultimately decided against going for an outside person and granted Sharma a fourth term as CEO and MD.

Under Sharma, Axis has seen its gross bad loans jump more than six times over the last three years to 250 billion rupees ($3.85 billion) as of end-2017. However, the move comes at a time when the bank has been under regulatory scrutiny for rising bad loans and other alleged lapses.

Shikha Sharma started her career in 1980 at ICICI Bank.

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