CSB Bank, the Kerala-based private sector lender, on Saturday said managing director and CEO C VR Rajendran has decided to take early retirement on health grounds.

Rajendran, whose term was to end on December 8, 2022, will continue till March 2022. He has been holding the position of managing director and CEO since December 9, 2016.

The development comes just a fortnight after the managing director and CEO of another private sector lender —RBL Bank’s Vishwavir Ahuja — proceeded on leave with immediate effect. However, this came after the Reserve Bank of India (RBI) appointed Yogesh Dayal as an additional director at the bank.

However, a statement from CSB Bank said the retirement of Rajendran, nearly nine months before his tenure was to end, was purely on health grounds and that his decision came after the advice of his physicians.

The board of CSB Bank has decided to constitute a search committee to identify and evaluate candidates both internal or external to replace him. The bank added that it will also engage an independent executive search firm in this regard.

CSB Bank, previously known as The Catholic Syrian Bank, was established in 1920. From a Kerala-based bank, it has expanded to other states such as Tamil Nadu, Maharashtra, Karnataka, Andhra Pradesh, Telangana, and Delhi among others.

During the tenure of Rajendran, the bank saw a key development when Prem Watsa led Fairfax infused Rs 1,200 crore in it.

His FIH Mauritius Investments currently holds around 49.72 per cent in CSB. The bank also re-aligned its organisational set-up for efficiently driving the operations & business strategy and re-branded in 2019 by changing its name to CSB Bank. In 2019, it also successfully completed an initial public offering (IPO) of Rs 409.67 crore.

Rajendran was also instrumental in turning around CSB Bank. Under his leadership, the bank returned back to the path of profitability in the first quarter of 2019-20, after incurring losses for many consecutive quarters.

CSB Bank added that he also ensured the effective implementation of a slew of sustainable growth strategies, which included healthy prudential parameters like risk assessment, business expansion with a firm eye on bottom line, reducing the non-performing assets (NPAs), moving to verticalised business model, and turning the bank to a new age agile profit making entity.

For the quarter ended September 30, CSB Bank posted a net profit of Rs 118.57 crore as compared to Rs 68.90 crore in the same period of the previous year. In terms of asset quality, its gross NPA ratio stood at 4.11 per cent as compared to 4.88 per cent in the preceding quarter. Its capital adequacy ratio during the September quarter stood at 21.37 per cent. Close to 36 per cent of its advances (Rs 5460 crore) were accounted by gold loans during the second quarter of this fiscal.

However, the bank has been in the news over a tussle between its management and trade unions over wage hike. The unions have in the past went on a strike to protest against non-revision of wages and service conditions. They have said that the lender has not implemented the hike that has been agreed to by the Indian Banks Association and the bank unions.