Govt extends Uday Kotak's term as IL&FS non-exec chairman by 6 months

The government has extended the term of Uday Kotak as the non-executive chairman of Infrastructure Leasing and Financial Services (IL&FS) by another six months.  

Kotak, who is also the managing director and chief executive officer of Kotak Mahindra Bank would continue being the non-executive director on the board of IL&FS until April 2, 2022, according to a notification by Department of Financial Services (DFS). His tenure—that has seen several extensions since he was appointed by the government to head the shadow lender—was supposed to expire on October 2. 

The Banking Regulation Act, 1949 prohibits a banking company to be managed by an individual who is a director of any other company. However, the provision does not apply for a temporary period not exceeding three months or such further period not exceeding nine months if allowed by the Reserve Bank of India (RBI). 

Kotak, who was appointed by the government to head the shadow lender's board in 2018, was allowed by the RBI to be on the board of IL&FS for three months, and for another nine months subsequently. He was further given two extensions of one year each to continue at the helm of the IL&FS group. 

The extension of further six months to Kotak has been granted by the government on recommendation of the RBI, the notification said. 

Earlier today, Kotak tweeted that the government-appointed board of the shadow lender estimates 61 per cent recovery at IL&FS. 

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