RBI Affirms HDFC Bank's Stability Amid Chairman Resignation

HDFC Bank's Status as a Systemically Important Institution

New Delhi, March 19: The Reserve Bank of India (RBI) announced on Thursday that HDFC Bank is classified as a Domestic Systemically Important Bank (D-SIB), highlighting its robust financial health, well-managed board, and capable leadership team. This statement follows the resignation of part-time chairman Atanu Chakraborty, who stepped down due to alleged 'ethical differences' within one of the largest private banking institutions.

The central bank acknowledged the recent changes at HDFC Bank in an official statement.

According to the RBI, 'A transition arrangement requested by the Bank regarding the Part-Time Chairman position has been approved.' It further noted that its ongoing evaluations revealed 'no significant concerns regarding the bank's governance or conduct.'

Additionally, the RBI confirmed that HDFC Bank is well-capitalized, maintaining a satisfactory financial status with adequate liquidity. The central bank will continue its dialogue with the bank's board and management regarding future directions.

Chakraborty resigned, citing disagreements with the bank over 'values and ethics.'

The RBI has sanctioned the appointment of Keki Mistry, a long-standing insider, as the interim part-time chairman for a period of three months, effective March 19, as per the bank's exchange filing.

Mistry reassured investors and analysts during a conference call that there are 'no significant issues' at the bank following Chakraborty's unexpected departure, despite the pressure on the bank's shares.

He emphasized that he would not have accepted the interim position if it did not resonate with his values and principles, stating, 'I would not have taken this responsibility at the age of 71 if it did not align with my values and principles.'

Mistry clarified that there was no internal conflict within the bank, asserting that 'there was nothing substantive.' He also pointed out that the RBI's comfort with the bank's situation is evident from their prompt approval of his three-month appointment.