CHENNAI: PN Vasudevan, managing director and CEO of Equitas Small Finance Bank, has submitted his resignation to the Board, citing persistent investor concerns over a perceived conflict of interest arising from his daughter’s role as co-promoter of an NBFC.

In a letter dated October 29, 2026, addressed to the bank’s chairman Anil K Sharma, a copy of which has been submitted to the stock exchange, Vasudevan said the perception had persisted despite disclosures to the Board and the Reserve Bank of India (RBI).

He said there were no transactions between Equitas and the NBFC, except a short-term deposit placed about two-and-a-half years ago and repaid on maturity.

Investors had repeatedly told him over the past three years that the perceived conflict was hurting the bank’s stock performance and value creation.

“Sometimes perceptions are stronger than reality,” he wrote, adding he wanted to remove the “overhang” so the stock could reflect the bank’s financial strength.

On Thursday, the stock plunged 20% intra day and closed at Rs 52.11, down 13%. Its net worth is Rs 6,553 crore. The resignation comes as Equitas crossed Rs 1 lakh crore in total business and posted its highest-ever quarterly profit of Rs 218 crore in Q2 FY27. Net income rose 32% year-on-year to Rs 1,313 crore, advances grew 30% to Rs 50,669 crore and deposits increased 19% to Rs 52,483 crore.

Vasudevan said he would continue as MD-CEO until his successor takes over. He has not specified an effective date for his departure.