Dear Readers,
“What has brought us here will not take us to the future.” Mukesh Ambani.
In 2012, Reliance Industries Chairman Mukesh Ambani made this observation. More than a decade later, it is a line that resonates as Jio Platforms comes out with its IPO. The company is headed by Akash Ambani, who is a Managing Director and the son of Mukesh Ambani. He has been with the company for the last 10 years and has risen to the position of Managing Director, and is currently steering one of the biggest IPOs in India.
Mukesh Ambani’s statement also connects with the banking sector has witnessed a flurry of senior management reshuffles in the past quarter. HDFC Bank, one of India’s largest banks, will soon have a new CEO and CFO. Kotak Mahindra Bank will get a new CEO, Axis Bank has already appointed a new CFO, and Bandhan Bank has appointed one too.
As new leaders join, existing ones are moving out. Kaizad Bharucha, for instance, has decided to step down before the new CEO joins HDFC Bank.
With Fairfax’s entry into IDBI Bank, there could be changes in senior management as the new promoter seeks to expand. Sunil Ramgopal Agrawal has taken over as CFO and Key Managerial Personnel. LIC’s CFO, Sunil Agrawal, has demitted office, and the company is yet to appoint a replacement. IndusInd General Insurance has appointed a new CEO. The RBI has appointed Sudhakar Mali as an Executive Director, while Lavanya Mundayur has been appointed CMD of New India Assurance. And there have been many more changes, all in this month alone.
This major reshuffle, driven not only by the conclusion of tenures but also by resignations, raises several questions. Is India’s banking and financial sector undergoing a major transition driven by generational change in leadership? Is this a case of promoters and boards versus management? Or is something deeper changing at the top of India’s financial sector?
For CFOs, however, the more pertinent question is what these leadership changes say about the evolving role of the finance function. How should CFOs look at succession planning? Are boards becoming more demanding about what they expect from CFOs and India Inc leaders? And are CFOs becoming strategic decision-makers rather than financial-reporting specialists?
Earlier I wrote a column on whether Indian banks need caretakers or transformers.
Why Are Leaders Leaving?
Coincidence? It seems so. But, as the saying goes, “Once is happenstance. Twice is coincidence. The third time is enemy action.” It may not be enemy action, but there are certainly different triggers. “Personal reasons” are often cited as the principal reason for resignations, but there could be several underlying factors.
Ashok Vaswani came to India specifically for the Kotak job, so his decision not to seek a second term is not easy to understand. Similarly, there was no indication that Sashidhar Jagdishan would not seek a third term, making his decision to convey this at the last minute surprising. An observer might argue that these are not merely personal decisions. In reality, however, everyone can only speculate. The reasons could include leadership pressures, differences over strategy, shareholder returns, relentless quarter-on-quarter performance demands and, importantly, compliance and regulatory challenges. Perhaps we will have to wait for the autobiographies.
A CFO today sits at the intersection of profitability, capital allocation, risk, regulation, technology and investor expectations. A change at the top can therefore alter not just reporting lines but also the strategic priorities of the finance function. How often do leadership transitions create uncertainty among senior executives and trigger further departures? That is a question boards may need to examine more closely.
Leader: Insider or Outsider?
The big debate is whether the CEO should be an insider or an outsider. Looking at appointments over the past decade, the RBI appears to have favoured outsiders when selecting leaders. Earlier, it chose Sashidhar Jagdishan from within HDFC Bank. Similarly, it has now chosen Anup Saha from within Kotak Bank. In many other cases, however, it has opted for outsiders. For instance, it chose Ashok Vaswani, a foreign banker, over internal candidates. It chose KVS Manian at Federal Bank, just as it had earlier chosen Shyam Srinivasan from Citibank for the same role. It also chose Rajiv Anand from Axis Bank for IndusInd Bank and Amitabh Chaudhry from HDFC Life for Axis Bank.
Whether an insider or an outsider, what matters most for every leader is shareholder profitability and value creation. All is well as long as these objectives are met. If a CEO fails to turn around performance and keep shareholders happy, the consequences can be severe.
Aditya Puri, former chief of HDFC Bank, had mastered this art. Uday Kotak, too, was a formidable leader, but could not control stock prices. The share prices of both banks are falling now.
For CFOs, the insider-outsider debate has a parallel dimension. Should companies groom finance leaders internally or look outside for fresh capabilities? As the CFO’s mandate expands beyond financial reporting into strategy, capital allocation, risk management, technology and business transformation, the definition of a finance leader is changing. The question for boards is no longer merely whether a CFO can manage the numbers, but whether the person can help shape the future of the business.
As finance functions become more strategic, organisations need to ensure that senior finance executives have the authority, organisational access and institutional support to perform a broader role. A CFO brought in to transform the finance function cannot be expected to succeed if the organisation continues to view the role primarily through the traditional lens of financial control and reporting.
Challenges of Leadership
Another major problem is the shortage of talent and leadership-ready candidates at the top. The reasons for this shortage need to be examined. Why is succession planning inadequate despite these banks being so large? Why are there so few candidates at the top despite years of experience?
For CFOs, succession planning should not be viewed merely as identifying a replacement for the current incumbent. It should be about building a finance leadership pipeline capable of handling increasingly complex responsibilities. Boards, too, are becoming more demanding about what they expect from CFOs and India Inc leaders. The CFO is increasingly expected to be a strategic decision-maker, rather than merely the custodian of financial reporting and controls.
The problem is who will address legacy issues. New leaders may not want to tackle them. Earlier, leaders would often write off bad loans soon after joining and start with a clean slate. The dynamics of NPAs are different now.
Banks, which are critical to the wider financial ecosystem, should be particularly careful about succession planning. Interestingly, there is another meaningful example. India’s largest company, Reliance Industries, is bringing its subsidiary Jio Platforms to the market through an IPO this week. The company is headed by Akash Ambani, son of Mukesh Ambani, who serves as managing director. He has been with the company for the past 10 years and has risen to the managing director’s position, allowing ample time for grooming for the top role.
As institutions steer through changing business models, technological disruption and evolving regulatory demands, their future will depend not just on who occupies the corner office, but on how effectively they prepare the next generation of leaders for challenges their predecessors may never have faced.
The message is equally clear. Succession planning cannot begin when a resignation is announced. It has to be an ongoing process of building capability, preparing successors and ensuring that the finance function remains resilient through leadership transitions. The real measure of a CFO may ultimately be not only what the finance function delivers during his or her tenure, but whether it is stronger and better prepared for the next one.
Also Read: HDFC Bank may see 9 senior executives superannuate through 2030
Please share your feedback, suggestions if any. You can reach me on amol.dethe@timesinternet.in.
As usual, I am adding here the top 5 stories of the week, trust you will find them meaningful.
1. High Inflation, costlier crude threaten festive demand and corporate margins
2. Explained: How foreign companies should structure their India entry under MCA’s 2026 guidance
3. GST reforms to roll out in phases from November 1, says CBIC member Mangal
4. Mahindra Manulife Insurance appoints Nilesh Kothari as CFO
5. India’s FTA Sprint: How a Year of Trade Diplomacy Is Reshaping the Growth Story
Happy Reading
Amol Dethe,
Editor,
ETCFO
(Editor’s note is a column written by Amol Dethe, Editor, ETCFO. Click here to read more of his articles exploring several buzzing topics)
