RBI found no material concern at HDFC Bank, says Governor Malhotra

The Reserve Bank of India (RBI) hasn’t found any material concern at HDFC Bank, Governor Sanjay Malhotra said on Wednesday, adding that the overall banking system remained resilient.   The statement follows the sudden resignation of Atanu Chakraborty, the part-time chairman of the country’s second-largest lender, in March, citing that his values and ethics were not in congruence with those of the bank.   “In our supervision, we have not come across any such matter related to governance or conduct,” said Malhotra, interacting with reporters after the monetary policy committee meeting on April 8.   He noted that in the general supervision, the minutes of the board meeting were also seen.

ALSO READ: HDFC Bank: AIBEA writes to FM for probe into issues raised by former chairman Atanu Chakraborty   Malhotra also stressed that the overall banking system remained resilient.   “It is very safe and strong. There are several regulations, whether it's about conduct, governance, liquidity, all of them with our supervisory framework, they keep the banking system very healthy and robust,” he said.   RBI officials say entity-specific issues don’t pose any systemic risks.   Meanwhile, the Reserve Bank plans a review of its guidelines for bank boards so that they focus more on policy decisions rather than daily operations.   “One has been hearing from the boards that a lot of operational matters are also coming to the bank boards. As a result, they cannot concentrate on real policy and strategic matters,” pointed Malhotra.   The matters to be placed before the boards of banks, along with their periodicity, are determined by the boards themselves, guided by the seven broad themes prescribed by the Reserve Bank of India, the regulator said. The RBI has also mandated certain policies and matters to be placed before the board for approval, review, or information.    “In an endeavour to enable boards to utilise their time effectively, and to facilitate a more focused and qualitative engagement on strategy and risk governance, the Reserve Bank has undertaken a comprehensive review and rationalisation of all such instructions. Draft directions in this regard will be issued shortly for public consultation,” it said on April 8.