Kotak Mahindra Bank’s new journey: Here's what Ashok Vaswani’s entry as MD and CEO means

When Ashok Vaswani was a young adult in the ’70s and ’80s, his uncle owned a shop in a five-star hotel in South Mumbai. Every year during the holidays, he would work at the shop, a duty he gladly accepted. He’d land at the store and sell merchandise all day. The hotel’s lively environment—foreign tourists bustling around, smartly dressed people gathering to meet—always captured his fancy, making him think of working in the hospitality industry some day.

As fate would have it, he embarked on a remarkable, nearly four-decade global banking journey that has seen him work in the UK, Africa, Europe, Turkey and the Middle East. He has also made significant career transitions during this period, from the US-based Citigroup to the UK’s Barclays group. In June 2022, he took up another assignment—as President at the US-based AI-enabled fintech firm Pagaya.

That’s why, when Kotak Mahindra Bank (KMB) announced it had received the RBI’s approval to appoint Vaswani as the next MD and CEO, it took many by surprise. But, from Founder and Director Uday Kotak’s standpoint, Vaswani’s addition is another crucial cog in the wheel that he had set in motion. For instance, he had already deployed a new strategy and gathered a global team to transform the bank into a tech-savvy institution, before hanging up his boots in September. “The chess board was ready with the lone exception of the king,” says an insider, requesting anonymity. “Vaswani’s placement has completed the team.”

KMB’s new strategy is all about achieving customer excellence on par with global tech firms like Amazon, as the tech-induced disruption pulls down old banking structures. And Vaswani fits the bill. A year ago, he had said, “One of the things that technology has done is completely disrupt the silos within which banks and financial institutions serve their customers. They are still organised by corporations and consumers, and technology is rapidly breaking down these barriers”.

That’s precisely what the bank has set out to get ahead of. It is already transforming from a conventional institution where IT plays a back-end role, to one where tech and customer-centricity take the lead. And the bank has gathered a number of leaders to achieve this. For instance, Milind Nagnur, with stints at JP Morgan, Citibank and Wells Fargo, has been appointed CTO; former Amazon hand Bhavnish Lathia has joined as Chief of Customer Experience and Head of Technology; while Unilever veteran Rohit Bhasin has been roped in as Head of Retail Liabilities Product and Chief Marketing Officer. Bhaskar Kumar, having worked at GE Capital, HSBC and Bajaj Finserv, has been appointed Chief Risk Officer. These professionals have further recruited top executives from global firms.

But, Vaswani will have to work under the careful oversight of the bank’s founder. “We anticipate some changes in the bank’s strategies,” stated a report by discount broking firm StoxBox. Experts say Vaswani has got his work cut out when it comes to building bridges with the founder and the rest of the senior

management. The reason being the past examples—of ICICI Bank, HDFC Bank, Axis Bank, and IndusInd Bank—where the entry of a new CEO has led to many senior-level exits. Which behoves Vaswani to tread carefully.

In terms of business, Vaswani has to step on the gas to build the mid-market book, an area where KMB plans to scale up. Similarly, the high-yielding unsecured book is also going up, while the risks are also high. Further, Vaswani is coming in at a time when the banking landscape is witnessing significant transformation, with the digital-first Jio Financial Services and the consolidation of public sector banks, set to reshape the industry.

While Uday Kotak’s departure has made the stock market uneasy, it would definitely keep an eye on Vaswani’s moves. Incidentally, risks also abound. “Banks face challenges in managing cybersecurity risk. They also have to adapt to geopolitical risk, unpredictable interest rates and bond yield fluctuations,” says Atul Parakh, CEO of share-trading app Bigul. But looking at Vaswani’s career, KMB looks firmly poised to execute its transformation.

@anandadhikari