After clean chit from legal review, attention will now shift to addressing succession issues at HDFC Bank

HDFC Bank will now have to focus on the looming succession issues, starting with the appointment of a new part-time chairman and the potential re-appointment of MD and CEO Sashidhar Jagdishan, whose term ends in October, after an independent legal review into the concerns flagged in the resignation letter of former chairman Atanu Chakraborty found no evidence to substantiate his claims, experts said.  
 
Chakraborty, a former bureaucrat, resigned as the part-time chairman of the country’s second largest lender on March 18, 2026. His resignation letter, which stated that “certain happenings and practices” within the bank observed over two years, were “not in congruence” with his personal values and ethics, sent shockwaves and raised several corporate governance-related questions on HDFC Bank.
 
The lender, subsequently announced an independent review by external law firms to evaluate if any concern was evident as raised in the statement made by Chakraborty in his resignation letter, and if Chakraborty recorded any dissent, and whether it was addressed.  
 
Wilson Sonsini Goodrich & Rosati, P.C. and Wadia Ghandy & Co. conducted the legal review over a three-month period and involved the review of thousands of documents and interviews of the independent directors and several members of senior management.

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The review concluded that Chakraborty’s statement and its implications were not substantiated by the record and witness interviews.
 
“No contemporaneous support for Chakraborty’s statement was found in the board or
board committee minutes or materials reviewed, or in contemporaneous communications about the review and approval of the minutes of meetings he attended,” the review noted.
 
Importantly, it noted that the bank and the external law firms repeatedly requested that Chakraborty speak as part of the legal review, but ultimately the interview never happened, something that has baffled corporate governance and market experts.\

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Chakraborty on Saturday, June 27, 2026, termed the review as just a “compliance exercise,” speaking with TV channel CNBC TV18, and stated that he repeatedly asked the board for the scope of the legal review, but wasn’t provided any clarity.
 
However, corporate governance expert Shriram Subramanian, the founder and MD of InGovern Research Services, pointed that the scope of the legal review had been fairly clear as to whether there was any documentary evidence recorded by Chakraborty on any issue.
 
“This review suggests there is no evidence of him having expressed any dissent anywhere else. It puts him in poor light,” Subramanian told Business Today.

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Chakraborty’s reaction and the fact that he didn’t speak with the law firms has also surprised others.
 
“What is surprising is that despite multiple attempts made by the law firms to have a word with Chakraborty, they were not successful. The point is you were given an opportunity to put forth your views and you declined. Later you go on to say you were not provided with the scope of the legal review. You are essentially creating smoke and mirrors,” Ajay Bodke, an independent market analyst, said.
 
The findings of the independent review, which released late on Friday night, should allay investor concerns. But, now that this issue is perhaps behind, the attention will quickly shift to the succession planning that still needs to be addressed and quickly.
 
Following Chakraborty’s sudden resignation, HDFC Bank was swift in appointing veteran banker Keki Mistry as the interim chairman for a period of three months. But, with a formal announcement yet to be made on a new part-time chairman, Mistry’s tenure was extended by another three months, a move approved by the Reserve Bank of India on June 18.
 
The bank is learnt to have shortlisted candidates, which also likely include a former deputy governor of RBI. However, there has been no official clarity on this front so far. HDFC Bank’s MD and CEO Sashidhar Jagdishan’s term is also ending in October. While the bank is keen on his reappointment, industry watchers say, the central bank may first want to clear the chairman’s appointment, who along with the board can then take a decision on Jagdishan’s reappointment.

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“For the bank now, succession planning should be the main focus. Appointment of the new chairman, the reappointment of or succession of Jagdishan will be something investors will now watch out for,” said Subramanian of InGovern.
 
In the days following the Chakraborty’s resignation, HDFC Bank shares plunged more than 13 per cent to hit a 52-week low of Rs 726.75 on April 2, 2026. Other issues like HDFC Bank taking action against a few senior executives for mis-selling AT-1 bonds linked to Credit Suisse, have also weighed on the stock.  
 
On Thursday, June 25, 2026, the stock closed at Rs 796.05, still down over 5.5 per cent from its close on March 18, 2026.
 
The pressure on HDFC Bank has also weighed on the wider banking sector. The BSE Bankex index touched a 52-week low on April 2, 2026, before staging a recovery. But, its still down around 2 per cent year-to-date.

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