Sashidhar Jagdishan, MD & CEO, HDFC Bank
| Photo Credit:
KSL
The dramatic exit last week of Atanu Chakraborty as Part-Time Chairman of HDFC Bank may prompt the Reserve Bank of India (RBI) to take a long, hard look when the Bank makes an application for a third term for its MD & CEO, Sashidhar Jagdishan.
Sources versed with the central bank approval process said when a Bank chief’s tenure comes up for renewal, it does not restrict its scrutiny to only balance sheet grrowth and financial health.
The process, which, at its heart, has the “fit and proper” criteria, goes much beyond the aforementioned factors and includes examining whether issues raised by the Directors were discussed and resolved, looking into regulatory violations/ whistleblower complaints and how they were addressed, and personal transgression, if any, among others.
“There is no smoke without fire. Things are not quite adding up, given that the Chairman hastily left his position and the Bank’s Directors emphasised that everything is hunky-dory,” they said.
Chakraborty quit the Bank’s board on March 17, citing “certain happenings and practices within the bank, that I have observed over last two years, are not in congruence with my personal values and ethics.”
Market Drag
Meanwhile, HDFC Bank’s stock continued to take a beating, plunging to a fresh 52-week low of ₹740.95 on Monday, with trading sentiments negatively influenced by Chakraborty’s sudden resignation and continued pessimism in the stock.
Among large private sector banks (PvBs), HDFC Bank’s stock declined the most (4.70 per cent). The stock had fallen nearly 12 per cent in four trading sessions.
Suresh Ganapthy, Managing Director and Head of Financial Services Research at Macquarie Capital, in a flash note on the developments at HDFC Bank, said: “We remove HDFC Bank from our Marquee buy list. Near-term underperformance may remain, while fundamentals remain strong with good ROA. At this point in time, governance concerns will weigh heavily on the stock. Investors would want more comfort from the board. “
Also, now the uncertainty surrounding MD & CEO Sashidhar Jagdishan’s reappointment will weigh down on the stock, he opined. Suresh observed that key risks include a slowdown in growth and further governance issues cropping up.
In his resignation letter dated March 17, 2026, Chakraborty said: “I joined the Board of HDFC Bank in May 2021. My tenure on the Board saw momentous events like the merger of the bank with HDFC Ltd, which created a conglomerate under the Bank. This strategic initiative made HDFC Bank the second-largest bank in the country. Though the benefits of the merger are yet to fully fructify.”
The Bank’s Interim Part-Time Chairman, Keki Mistry, noted that, at the age of 71, he would not take on the responsibility as 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.
Published on March 23, 2026
