HDFC Bank CEO Addresses Governance Challenges Following Chairman's Resignation
Governance Concerns at HDFC Bank
Sashidhar Jagdishan, the Managing Director and CEO of HDFC Bank, has characterized the resignation of Atanu Chakraborty, the former part-time chairman, as a significant hurdle for the institution. He reaffirmed the bank's dedication to upholding exemplary corporate governance standards. Chakraborty resigned on March 18, citing that certain occurrences and practices he witnessed at the bank over the last two years conflicted with his personal ethics and values. His departure ignited extensive discussions regarding governance at India's second-largest private bank.
In the recently released annual report for 2025-26, Jagdishan acknowledged the concerns that arose following Chakraborty's exit and outlined the measures taken by the board to conduct an independent investigation into the matter. He pointed out that Chakraborty's resignation letter raised questions about the bank's governance practices. "The remarks in Chakraborty’s resignation letter prompted inquiries into the governance standards at the bank," Jagdishan stated in the report.
To address the issues highlighted, the board engaged both domestic and international law firms for an independent review, given that the bank's American Depositary Receipts (ADRs) are traded on the New York Stock Exchange. Jagdishan remarked, "Considering the ADRs are listed on the NYSE, the board deemed it wise to involve both domestic and international legal firms for this review." A special committee comprising independent directors was also formed to oversee the legal review and ensure effective communication between the bank and the law firms.
The review process involved scrutinizing a significant amount of board minutes, internal documents, communications, and conducting interviews with independent directors, senior management, and heads of key control functions from the two years leading up to Chakraborty's resignation. Ultimately, the review found that the claims made in the resignation letter and the conclusions drawn from them were not substantiated by the records or witness testimonies.
Commitment to Governance
Jagdishan emphasized that HDFC Bank remains focused on enhancing its governance framework despite the challenges faced. "We have continued to improve our internal structures and refresh essential control processes as part of our organizational journey," he stated. The bank has appointed Rajiv Kumar, a former IAS officer and ex-Chief Election Commissioner, as its new part-time chairman and independent director. Jagdishan welcomed Kumar, noting his significant contributions to revitalizing the banking and financial services sector in India.
In his communication to shareholders, Jagdishan also discussed the merger between HDFC Ltd. and HDFC Bank, describing it as a pivotal achievement during his tenure. He noted, "The mortgage business is becoming increasingly robust, and we rank among the top two players in this sector in the country." He further mentioned that the bank has successfully opened savings accounts for over 95% of new home loan customers at the time of loan disbursement, while cross-selling activities have remained strong.