Are regulators becoming managers? Concerns grow over autonomy risks

Regulators are increasingly asserting control over MD appointments by rejecting candidate panels submitted by regulated entities, curtailing proposed tenures, and altering remuneration structures

The forex liability accounting fiasco of IndusInd Bank has attracted considerable media attention. Just days ago, the approval for the reappointment of the incumbent managing director (MD) for one year, instead of the requested three years, hogged headlines. Notably, the bank’s request for a three-year tenure was similarly curtailed to two years on the previous occasion. While successive truncated approvals and the fiasco may be a coincidence, it remains puzzling how an individual deemed unsuitable for a three-year term is considered suitable for a curtailed tenure. 

 

A similar situation unfolded in 2023 when the incumbent MD of Kotak Mahindra Bank