AU Small Finance Bank Engages Korn Ferry for Succession Planning Strategy

AU Small Finance Bank has engaged Korn Ferry to develop a succession plan and identify key personnel for its transition into a universal bank. The plan includes formulating a succession strategy for current MD Sanjay Agarwal, who has been at the helm for over eight years. The lender will also look to attract fresh talent from larger banks and NBFCs based out of Mumbai.

AU Small Finance Bank (AU SFB), having received in-principle approval from the Reserve Bank of India (RBI) to transition into a universal bank, is now focusing on succession planning and attracting fresh talent. The bank has engaged Korn Ferry, a global human resources consulting firm, to develop a comprehensive succession plan and identify key personnel for its transition [1].

The succession plan includes formulating a strategy for the current Managing Director (MD), Sanjay Agarwal, who has been at the helm for over eight years. Agarwal, who has headed the Jaipur-based small finance bank since its inception in 2017, will continue to lead the bank as it navigates through the regulatory requirements to become a universal bank [1].

As part of the transition, AU SFB will look to attract fresh talent from larger banks and Non-Banking Financial Companies (NBFCs) based out of Mumbai. The bank aims to build a strong leadership team to support its growth and expansion as a universal bank. This move is part of the bank's broader strategy to enhance its operational efficiency and customer service, which are crucial for competing in the highly regulated and competitive banking sector [2].

The transition to a universal bank will also involve changes in the bank's company structure, including the creation of a non-operating financial holding company (NoFHC) and rebranding from AU Small Finance Bank Limited to AU Bank Limited. These changes are essential to meet the regulatory requirements set by the RBI and to ensure the bank operates independently without conflicts of interest [1].

While the exact timeline for these changes is yet to be finalized, the bank has 18 months to set up the holding company and complete the rebranding process. The universal bank tag is expected to bring significant changes in customer perception and will help AU SFB establish itself as a more secure and trustworthy financial institution [1].

The bank's focus on succession planning and attracting fresh talent is a strategic move to ensure a smooth transition and to position itself strongly for the future. As Agarwal mentioned, the biggest advantage of the universal bank tag is the change in customer perception, which will be crucial for the bank's sustainability and growth [1].

References:
[1] https://www.livemint.com/industry/banking/au-small-finance-bank-precondition-set-up-non-operational-financial-holding-company-rebranding-founder-sanjay-agarwal-11754665970379.html
[2] https://www.business-standard.com/markets/capital-market-news/rbi-grants-in-principle-approval-to-au-small-finance-bank-limited-for-transition-into-a-universal-bank-125080800599_1.html