HDFC Bank Chairman: ‘No governance related concerns at the systemic level’

Rajiv Kumar, the newly appointed part-time chairman of HDFC Bank, told shareholders on Wednesday that there were no governance-related concerns at the systemic level. Speaking at the bank's 32nd annual general meeting, he emphasised that the board would ensure control functions remained fully empowered and maintain zero tolerance towards any unethical practices, which would be addressed promptly and firmly on a case-by-case basis.

“There are no governance related concerns at the systemic level,” he said, adding: “Large institutions like HDFC Bank may encounter some issues from time to time. It is important that these issues are addressed in a timely and transparent manner.”

Kumar stated that the board was committed to upholding the highest standards of corporate governance, focusing on integrity, transparency, accountability, and prudent stewardship. He reassured shareholders that the bank had strong control systems and oversight at committee levels, describing the bank as fundamentally strong with a pristine balance sheet.

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The Reserve Bank of India approved Kumar's appointment as part-time chairman for a three-year term on July 15, following an external legal review that cleared the bank in the controversy related to former chairman Atanu Chakraborty's resignation. Kumar assumed charge as chairman in July.

Chakraborty resigned in March, citing certain happenings and practices within the bank that conflicted with his personal values and ethics. He later mentioned in an interview that the alleged mis-selling of Credit Suisse’s perpetual bonds was a point of disagreement with the bank’s management. He spoke publicly because the issue had already been discussed by the managing director and CEO, Sashidhar Jagdishan.

Six days after Chakraborty's resignation, HDFC Bank appointed external law firms to conduct an independent legal review of the concerns raised. The review covered the two years before his resignation and included examination of board and committee meeting documents, interviews with independent directors and senior executives, and thousands of documents.

In June, the bank said the three-month review found no evidence supporting Chakraborty's governance concerns. The review did not find contemporaneous support for his statements in board materials or communications. After Chakraborty's exit, Keki Mistry was appointed interim chairman with RBI clearance.