MUMBAI, Oct 23 Reuters Shares of Kotak Mahindra Bank fell more than 2 on Monday after it named veteran banker Ashok Vaswani as managing director and CEO following founder Uday Kotak39;s resignation, raising fears of volatility in the Indian lender39;s business going forward.

Shares fell as much as 2.7 to 1,722.45 rupees on Monday. The stock was last down 1.2 at 1,749 rupees.

The private lender said on Saturday that the central bank has approved the appointment of the veteran international banker Vaswani, surprising analysts who had expected an insider would succeed the founder for the top job.

The bank39;s preference may have been for existing senior management, with KVS Manian and Shanti Ekambaram being top contenders for the CEO39;s role, Jefferies39; analysts said in a note.

Jefferies downgraded the stock to hold from buy and cut the target price to 1,940 rupees apiece from 2,400 rupees earlier.

Emkay said that the new CEO would have a tall task on his hands to manage senior management attrition or any business dislocation.

The brokerage maintained a hold rating on the stock and cut the target price to 1,955 rupees per share from 2,000 rupees earlier.

Moreover, as the Reserve Bank of India RBI caps the age of CEOs at 70, five years down the line, the bank would again be talking of leadership transition issues, assuming Vaswani serves two full threeyear terms, Macquarie analyst Suresh Ganapathy said in a note.

By that time existing senior management, who were…