The board of IDFC First Bank has approved the re-appointment of V Vaidyanathan as the managing director and CEO of the bank for a further period of three years.

Vaidyanathan’s current term expires on 18 December 2024.

The board, which met on 27 April 2024, gave its approval based on the recommendation of the nomination and remuneration committee.

The appointment is subject to the approval of the Reserve Bank of India (RBI) and the bank’s shareholders.

Vaidyanathan is not debarred from holding the office of director of the Bank, by virtue of any SEBI order or any other such authority. He is not related to any director or key managerial personnel of the bank, the lender said.

Vaidyanathan took over as the MD and CEO of IDFC First Bank in December 2018 after the merger of Capital First and IDFC Bank.

He worked with Citibank from 1990-2000. He joined ICICI Bank in 2000 and set up its retail banking division. He was appointed to the ICICI Bank board in 2006 at the age of 38. He took the branch network to 1,411, built a large CASA book and retail lending, including mortgages, auto loans and credit cards of Rs 1.35 trillion by 2009. He became the MD and CEO of ICICI Prudential Life insurance in 2009.

Chasing an entrepreneurial opportunity, he left the ICICI group in 2010 and acquired about 10% equity in a small, listed, real-estate financing NBFC with a market cap of Rs 780 crore, with an idea to convert it to a commercial bank. To raise the required funds of Rs 78 crore, he pledged the purchased stock and his home as collateral.

He then discontinued the NBFC's existing businesses of real estate financing, equity broking and forex business and instead started financing Retail & MSME clients for Rs 5,000 to Rs 1 crore, using tech-led algorithms. He demonstrated the proof of concept of Retail and MSME financing to private equity players and raised fresh equity of Rs 810 crore in 2012, recapitalised the company, and became its chairman and CEO. He then reconstituted the board and renamed the company Capital First.

Capital First successfully lent to seven million customers and grew the retail loan book from Rs 94 crore in 2010 to Rs 29,600 crore by 2018, with high asset quality of gross and net NPA of around 2% and 1% respectively for over eight years. 

Between 2010 and 2018, the company turned around from losses of Rs 30 crore to profit of Rs 358 crore. The share price increased 7X from Rs 122 (2010) to Rs 845 (2018), and the market cap increased 10X from Rs 780 crore to Rs 8,200 crore.

Since his ownership in the company was acquired by him through leverage, he sold 1.5% of Capital First in 2017 at Rs 688 a share to partially close the loan taken to acquire the shares.

Having built Capital First to scale, he looked out for a commercial banking licence to convert it to a bank. In 2018, opportunity struck in the form of an offer for merger from IDFC Bank. He led the integration of the two institutions and took over as the MD and CEO of the merged bank, renamed to IDFC FIRST Bank.

Since merger in 2018, he has increased the loan book to Rs 2,00,965 crore, of which retail, commercial and rural finance grew to Rs 1,66,604 crore. Between December 2018 to March 2024, the customer deposits increased from Rs 38,455 crore to Rs 1,93,793 crore, CASA ratio increased from 8.7% to 47.2%, NIM increased from 2.9% to 6.4%, and the bank turned into profits. In FY24, net profit stood at Rs 2,957 crore.