HDFC Bank ethics storm: Bank should come clean on issues raised in Chairman’s resignation, says InGovern’s Shriram Subramanian
Founder of InGovern Research Services said Atanu Chakraborty had made a big telling statement in his resignation, which the bank needed to proactively address, else risk losing its governance premium.
- Mar 19, 2026,
- Updated Mar 19, 2026 12:38 PM IST
HDFC Bank should constitute a committee of independent directors to reach out to Atanu Chakraborty and come out with a detailed statement on the issues he raised in his resignation, rather than just swiping them under the carpet, a top corporate governance expert has said.
“That the Chairman has to write this sort of a letter saying that the bank's practices are not aligned with his governance or his ethics is definitely a big surprise,” Shriram Subramanian, the founder and MD of InGovern Research Services told Business Today.
“That is precisely my concern that the management will sort of swipe it under the carpet and say that there are no concerns per se,” pointed Subramanian of InGovern. He feels the bank should constitute a committee of independent directors and reach out to Mr Chakraborty and come out with a white paper on the matter.
“The management cannot just say that all is hunky-dory and wish it away, because it’s a big telling statement by the chairman,” he said.
In an exchange filing late on Wednesday night, the country’s largest private sector lender said that its Part-Time Chairman and Independent Director Atanu Chakraborty had resigned.
“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,” Chakraborty said in his resignation letter. He confirmed that there were no other material reasons for his resignation.
The resignation sent the stock tumbling on Thursday to its 52-week low of Rs 772 on the BSE, before recovering slightly to around Rs 803.90 in noon trading, still down close to 5%.
The HDFC Bank management tried to assure investors and shareholders that the resignation was not due to any regulatory matter and there was no material issue seen on bank’s operations. The bank has appointed Keki Mistry as the interim chairman for three months, during which time the Board will have to identify a full-time non-executive chairman.
In a conference call on Thursday morning, Mistry stressed that the resignation did not reflect any deep problems and that the bank had strong internal processes and governance standards.
The chairman’s resignation letter citing issues of ethics and value assumes importance considering HDFC Bank is a systematically important financial institution. The Reserve Bank of India will be closely watching the developments.
The RBI noted the bank had sound financials, professionally run board and competent management.
“Basis our periodical assessment, there are no material concerns on record as regards its conduct or governance. The bank remains well-capitalized and the financial position of the bank remains satisfactory with sufficient liquidity,” the regulator said in a statement, adding that it would continue to engage with the bank’s board and management on the way forward.
Atanu Chakraborty was appointed as the temporary chairman of HDFC Bank hack in 2021. His reappointment was approved by the RBI in May 2024 for three years till May 2027. During his tenure, there were two major developments at the lender. In 2023, parent HDFC Ltd, then the country’s largest mortgage lender, merged with subsidiary HDFC Bank. In 2025, HDB Financial Services, the unit of HDFC Bank went public through a Rs 12,500 crore IPO.
In his resignation letter, Chakraborty termed the merger of HDFC and HDFC Bank as a momentous event. The strategic initiative made HDFC Bank the second largest bank in the country, though the merger benefits were yet to fully fructify, he said.
Whether there was just a difference of opinion on a few things or perhaps there were major concerns over how things were run, is still not clear in his resignation.
“It could be the result of multiple things. One is just where the chairman may have asked for information and the management was not forthcoming; it could be that he was not able to get his views aired or it could well be some issues,” said Subramanian of InGovern.
HDFC Bank has been sought after among domestic as well as foreign shareholders for long, for its strong and steady operational performance.
“HDFC Bank will lose its governance premium or people will start questioning it if the bank doesn’t proactively do something about this matter,” stressed Subramanian.
HDFC Bank should constitute a committee of independent directors to reach out to Atanu Chakraborty and come out with a detailed statement on the issues he raised in his resignation, rather than just swiping them under the carpet, a top corporate governance expert has said.
“That the Chairman has to write this sort of a letter saying that the bank's practices are not aligned with his governance or his ethics is definitely a big surprise,” Shriram Subramanian, the founder and MD of InGovern Research Services told Business Today.
“That is precisely my concern that the management will sort of swipe it under the carpet and say that there are no concerns per se,” pointed Subramanian of InGovern. He feels the bank should constitute a committee of independent directors and reach out to Mr Chakraborty and come out with a white paper on the matter.
“The management cannot just say that all is hunky-dory and wish it away, because it’s a big telling statement by the chairman,” he said.
In an exchange filing late on Wednesday night, the country’s largest private sector lender said that its Part-Time Chairman and Independent Director Atanu Chakraborty had resigned.
“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,” Chakraborty said in his resignation letter. He confirmed that there were no other material reasons for his resignation.
The resignation sent the stock tumbling on Thursday to its 52-week low of Rs 772 on the BSE, before recovering slightly to around Rs 803.90 in noon trading, still down close to 5%.
The HDFC Bank management tried to assure investors and shareholders that the resignation was not due to any regulatory matter and there was no material issue seen on bank’s operations. The bank has appointed Keki Mistry as the interim chairman for three months, during which time the Board will have to identify a full-time non-executive chairman.
In a conference call on Thursday morning, Mistry stressed that the resignation did not reflect any deep problems and that the bank had strong internal processes and governance standards.
The chairman’s resignation letter citing issues of ethics and value assumes importance considering HDFC Bank is a systematically important financial institution. The Reserve Bank of India will be closely watching the developments.
The RBI noted the bank had sound financials, professionally run board and competent management.
“Basis our periodical assessment, there are no material concerns on record as regards its conduct or governance. The bank remains well-capitalized and the financial position of the bank remains satisfactory with sufficient liquidity,” the regulator said in a statement, adding that it would continue to engage with the bank’s board and management on the way forward.
Atanu Chakraborty was appointed as the temporary chairman of HDFC Bank hack in 2021. His reappointment was approved by the RBI in May 2024 for three years till May 2027. During his tenure, there were two major developments at the lender. In 2023, parent HDFC Ltd, then the country’s largest mortgage lender, merged with subsidiary HDFC Bank. In 2025, HDB Financial Services, the unit of HDFC Bank went public through a Rs 12,500 crore IPO.
In his resignation letter, Chakraborty termed the merger of HDFC and HDFC Bank as a momentous event. The strategic initiative made HDFC Bank the second largest bank in the country, though the merger benefits were yet to fully fructify, he said.
Whether there was just a difference of opinion on a few things or perhaps there were major concerns over how things were run, is still not clear in his resignation.
“It could be the result of multiple things. One is just where the chairman may have asked for information and the management was not forthcoming; it could be that he was not able to get his views aired or it could well be some issues,” said Subramanian of InGovern.
HDFC Bank has been sought after among domestic as well as foreign shareholders for long, for its strong and steady operational performance.
“HDFC Bank will lose its governance premium or people will start questioning it if the bank doesn’t proactively do something about this matter,” stressed Subramanian.