Ujjivan Small Finance Bank's MD And CEO, Nitin Chugh, Resigns
After a little over two years in the leadership position, Nitin Chugh has resigned as the managing director and chief executive of Ujjivan Small Finance Bank. In an announcement to the exchanges, the bank said that it has received Chugh's resignation letter dated Aug 18.
"We hereby inform you that the Bank has received a letter dated August 18, 2021 from Mr. Nitin Chugh tendering his resignation from the position of Managing Director and CEO of the Bank w.e.f. close of business hours on September 30, 2021," the bank told the bourses.
Chugh had taken over leadership at the small finance bank in May 2019. Prior to this, he headed digital banking initiatives at HDFC Bank.
"He has confirmed, in his resignation letter, that he is resigning due to personal reasons and there are no material reasons," the Bank's filing with stock exchanges said.
Chugh's two years at the bank included the pandemic affected FY21. Ujjivan Small Finance Bank reported a net loss of Rs 233 crore in the April-June quarter, as the second wave of Covid infections hurt asset quality.
The gross non-performing asset ratio for the bank rose to 9.8% by June 30, from 7.1% in March. This was primarily because collection efficiency dropped from 94% in March to 72% in May, due to the second wave of the pandemic.
According to the filing, Chugh will also cease to be a director on the bank's board.
This is the second high level exit at Ujjivan Small Finance Bank this month. On Aug. 12, Harish Devarajan resigned as an additional director on the bank's board.
In April, a special resolution to appoint Samit Ghosh as CEO of Ujjivan Financial Services Ltd. was rejected by shareholders. Ujjivan Financial Services is the holding company for the small finance bank. Ghosh continues as non-executive chairman of the parent company.
According to shareholding data on the BSE, 100% of Ujjivan Financial's shareholding is public. Foreign portfolio investors hold about 23% in the company, while private equity funds hold 17.4%.
Ujjivan Financial, in turn, holds 83% in Ujjivan Small Finance Bank.
Following a nod from the RBI, Ujjivan Financial Services, in July, said that it would take steps to amalgamate the holding company with the small finance bank.
A statement by the bank, issued late Thursday evening, said it had been working to strengthen the board. "The Bank has recently witnessed several challenges on the business front coupled with several resignations both at the Board level and senior management. The immediate task of Bank Board in close collaboration with the holding company would be to bring back the stability and achieve its desired goals and growth, complete the reverse merger and see that shareholders’ interest is duly taken care of. The Bank looks at the future with optimism."