Equitas SFB CEO PN Vasudevan rules out resignation U-turn amid 32% stock crash, says ‘no conflict of interest’

Speaking to CNBC-TV18, Vasudevan said his resignation was not an overnight decision and followed two to three years of concerns over a perceived conflict of interest. “This time I think we have to go through with it because we strongly believe and I personally strongly believe that this is in the best interest of both the bank and its stakeholders including employees and investors,” he said. Equitas Small Finance Bank shares plunged 13 percent to Rs 49.74 in late-morning trade today, extending Thursday’s 12.2 percent decline.

It lost as much as 32 percent from yesterday's high to today's low, and is now down 24 percent over the two sessions, pushing its market capitalisation to below Rs 5,700 crore. Vasudevan’s resignation followed concerns over his daughter Varshini Vasudevan Pathangi’s involvement in Unico Housing Finance, an unlisted non-banking finance company she founded in 2023. The outgoing CEO maintained that there was no actual conflict of interest, saying the issue was entirely one of perception.

“In our case there is absolutely no conflict of interest at all but it’s a perception,” he told CNBC-TV18. He said the bank had been trying to address the perception for nearly three years without success. Vasudevan had previously announced plans to step down in 2022 to pursue philanthropic activities but subsequently withdrew his resignation after the board requested him to continue. However, this time he categorically ruled out reversing his decision.

Vasudevan said the bank expected to complete its leadership transition within four to six months, with the board having asked its nomination and remuneration committee to begin identifying a successor. The bank will consider both internal and external candidates for the position. He also said he was willing to continue serving until a successor assumed charge, ensuring continuity in leadership and operations.

“We are not rethinking it,” Vasudevan said, reiterating that his resignation decision remained unchanged. Addressing concerns about Equitas Small Finance Bank’s fundamentals following the sharp stock decline, Vasudevan maintained that the lender remained financially strong across growth, profitability and asset quality parameters. He pointed to the bank’s highest-ever quarterly profit in Q2 FY27, and said its microfinance exposure had declined to around 10-11 percent, with secured lending accounting for most of the remaining portfolio.

Equitas reported a net profit of Rs 218 crore for the fiscal second quarter, nine times the year-ago figure, while total income rose 28 percent to Rs 2,358 crore. Vasudevan also defended the bank’s governance standards and expressed confidence that removing the perceived conflict-of-interest overhang would eventually allow its valuation to reflect its underlying financial performance.