Mumbai, Oct. 29 -- Shares of Equitas Small Finance Bank crashed 20% on Thursday, after managing director and chief executive officer PN Vasudevan resigned citing "overhang" of potential conflict of interest from his daughter promoting a non-bank entity.

In a letter to the bank's chairman and board of directors, Vasudevan, who founded Equitas as a microfinance institution in 2007, conveyed his intention to step down to pursue certain "personal and social initiatives". He said his daughter is the co-promoter of an NBFC which received its licence from RBI in 2023, which was disclosed to the bank's board and the Reserve Bank of India. Vasudevan's daughter, Varshini Vasudevan Pathangi, founded Unico Housing Finance in 2023.

Despite him being...