India caps terms for founder-CEOs in blow to richest banker

[NEW DELHI] The Reserve Bank of India has restricted how long a bank's founder can stay on as chief executive officer, a move that will come as a blow to the world's wealthiest banker.

Founder-CEOs can serve for 12 years, or 15 at the discretion of the regulator, the RBI said in a statement on Monday. To enable smooth transition, lenders have until Oct 1 to comply, and founder-CEOs will be allowed to complete their current terms.

The new rules will directly impact Uday Kotak, CEO and founder of Mumbai-based Kotak Mahindra Bank, who has a net worth of US$14.2 billion, according to the Bloomberg Billionaires Index. Mr Kotak set up an investment company in 1985, which converted into a lender in 2003 and Mr Kotak has led the bank since then.

The RBI had approved a three-year extension from Jan 1 for Mr Kotak to continue as chief executive officer of Kotak Mahindra Bank. Representatives for the lender didn't immediately respond to emails and calls for comment.

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