Shares of the bank hit another new low at ₹772 before pulling back slightly to close at ₹780.
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SHAILESH ANDRADE
HDFC Bank’s Board of Directors are scheduled to meet mid next week to take stock of the situation arising from the abrupt resignation of Part-Time Chairman Atanu Chakraborty and discuss his possible replacement, among others.
While HDFC Group veteran Keki Mistry has stepped in as Interim Part-time Chairman of the Bank with effect from March 19, 2026, for a period of 3 months, the Board is keen on fast-tracking the process of finding a suitable replacement for Chakraborty, said sources clued in to developments in this regard.
In an analyst call, Mistry had said: “As far as our seeking some explanation from Chakraborty, the Board will of course meet very, very soon and take a call on how to take it forward.”
The possibility of a career central banker such as former Deputy Governor of RBI M Rajeshwar Rao being called up is high, they said. It may be pertinent to mention here that Shyamala Gopinath, former Deputy Governor of RBI, was Chairperson of HDFC Bank from 2015 till 2021.
Investor Jitters
Chakraborty stirred a hornet’s nest by suddenly resigning as the bank’s Part-time Chairman and Independent Director, citing “certain happenings and practices within the bank.”
The after-shock of his exit continued to reverberate and impact investor confidence on Friday as the firefighting done by the Bank’s Board, and the RBI has neither revealed much details nor denied the allegations outright. The management explanation and RBI confidence-building exercise were not that convincing to instil confidence, say analysts.
Shares of the bank hit another new low at ₹772 before pulling back slightly to close at ₹780.
Chakraborty’s attempts to play down the issue later, stating that his resignation was “routine” and not indicative of any wrongdoing at the bank, did not cut ice.
Accountability Push
Shriram Subramanian, Founder and Managing Director of proxy advisory firm Ingovern Research Services, said the Committee of independent directors should constitute a separate fact-finding committee on the allegations made by Chakroborty and come out with a white paper to assuage investors concern besides elaborating on any actions that need to be taken, if at all, to avoid repetition of such incidents that erode investors wealth.
Though the central bank has assured investors on the bank’s health, it can also conduct an independent probe on the allegations, he added.
HDFC Bank, being owned by shareholders, institutional investors should play a more active role to avoid unforeseen accidents, as banking industry veteran Uday Kotak advocates for bank promoters to have “skin in the game” to ensure accountability, arguing that managers with no ownership can make risky lending decisions using depositors’ money, said Subramanian.
Sameer Sawant, Research Analyst, Mirae Asset Sharekhan, said, despite the assurance given by the bank and RBI, the overhang lies in the two pending decisions on appointment of a permanent Chairman and the call on MD & CEO Sashidhar Jagdishan’s reappointment — both of which markets will price cautiously until resolved.
Given that HDFC Bank is a widely-held company without a controlling promoter, large investors in particular should engage with the board, demand transparency on “ethical concerns,” he said.
Narinder Wadhwa, MD & CEO, Ski Capital Services, said the recent development at HDFC Bank may temporarily impact investor sentiment, but the situation appears well contained by the RBI and the bank.
Absence of a promoter in HDFC Bank places greater responsibility on the board and institutional shareholders to ensure robust oversight and transparency, he said.
From an investment perspective, he said with valuations around 1.5 times book value, long-term investors may view this as an opportunity rather than a concern, he added.
Mistry emphasised that, at the age of 71, he would not take on this responsibility (as Interim Chairman) for three months if the systems, processes, and governance practices in the bank did not align with his principles and his level of integrity.
“RBI gave their approval for making me interim chairman for a period of three months to just stabilise things and then move on,” he said. He strongly refuted allegations that there was a “power struggle” in the Bank.
Renu Sud Karnad, Non-Executive (Non-Independent) Director, said: “In fact, we repeatedly asked him (Chakraborty) to tell us why, what had triggered this (resignation) and if there was anything we had to do to get it right. But he said there was nothing. And that was a bit baffling.”
The RBI, in a statement on Thursday, said HDFC Bank is a Domestic Systemically Important Bank (D-SIB) with sound financials, a professionally run board and a competent management team. Based on its periodical assessment, there are no material concerns on record as regards its conduct or governance.
Published on March 20, 2026
