The UTI Bank board has found a way to retain P J Nayak at the helm by recommending his name as the executive chairman for two years from August 1, 2007. The bank's board made the proposal after a meeting in Mumbai on Monday.

Nayak, who is the chairman and managing director of UTI Bank, had decided to quit after his term ends on July 31, 2007, as the Reserve Bank of India (RBI) had declined a two-year extension to his tenure as chairman and managing director.

The central bank had also sought to split the post of chairman and managing director at the bank, in line with the Ganguly committee report on corporate governance and international best practices.

This was despite the fact that the bank's largest shareholders, Specified Undertaking of the Unit Trust of India (SUUTI - 27.47 per cent) and Life Insurance Corporation (10.39 per cent) had cleared extension of Nayak's tenure.

However, Nayak's appointment from August 1 is subject to approval from the RBI, SUUTI and shareholders.

S B Mathur, administrator of SUUTI, said, "The bank has done well under Nayak. The next two years will be critical for the bank as it is going through a rebranding exercise and is entering new businesses like insurance, mutual funds and private equity."

He added that a chairman requires to have a different perspective and needs at least two years to be effective. "After two years, we would have a second line of executives with the right exposure and capability to take over from Nayak," Mathur said.

Nayak's tenure as the CMD of UTI Bank has not been easy. He also offered to exit the bank in 2004 as the board had decided to split the post of chairman and MD. It was then a major spat between the bank's brass and promoter-shareholder SUUTI. <hr>

Wants to be renamed Axis Bank

The UTI Bank board at a meeting mooted a change in the bank's name to Axis Bank, subject to approvals from the government and the Reserve Bank of India.

The bank, in a statement to the Bombay Stock Exchange, stated: "The recommendation for the change in name has arisen from the existence of several shareholder-unrelated entities using the UTI brand, and the consequent brand confusion that it generates."

The bank hopes to get all approvals by end-June and the rebranding to be completed within another three months.