Fino Bank promoters elected its chairman and independent director

In an unusual move, the promoters of a programmed commercial bank including big names such as Life Insurance Corporation of India, ICICI Bank, ICICI Lombard, Corporation Bank, Indian Bank, Blackstone, BPCL, IFC Washington, Intel Capital and Union Bank rejected the president of the bank whom they had appointed themselves.

Fino Paytech, the holding company and 75% owner of Fino Payments Bank, on Saturday voted against a resolution to reappoint chairman and independent director Mahendra Kumar Chouhan and Puneeta Kumar Sinha, another independent director, on Saturday. Even a project to modify the conditions of the Esop was rejected.

This leaves digital payment banking headless for now. An overwhelming majority of 80% of shareholders, including 100% of the promoter group, voted against the renewal of Chouhan and Sinha.

Both Chouhan and Sinha have served on the board of Fino Payments since May 2017. The banks began operations in June 2017 after obtaining its main license in 2015.

When contacted, Rishi Gupta, Executive Director and CEO, told ET, “I can’t comment on that.” A statement from Fino Payments said: “As a publicly traded entity, we have duly gone through the process and all relevant information is in the public domain. There is nothing further to add.” Ashok Kini, the president of Fino Paytech, could not be reached for comment despite repeated attempts. Analysts said the sudden onset of unrest could also negatively impact the bank’s plans for a reverse merger with its holding company, due later in June. “Unlike others like HDFC Ltd or IDFC, here the promoters who chose the chairman seem to have massively lost faith in him,” an institutional shareholder in the company said on condition of anonymity.

Attempts to reach Sinha on his cell phone generated no response up to press time. After listing at a discount of more than 5% at ₹544 per share on the NSE last November, Fino shares are trading at an all-time low. On Friday, the stock was trading at ₹298.40/coin. Analysts, however, believe the bank is on the mend, after announcing a 116% increase in net profit to ₹14.1 crore for the quarter ended December 2021 on the back of healthy revenue.

The bankers suggest that the unanimous decision of the promoters to vote against their own president could have been pushed back by the regulators. RBI generally authorizes the appointment of presidents and CEOs of banks.

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