HDFC Bank likely to reappoint Sashidhar Jagdishan as CEO for a third term: Report

Sashidhar Jagdishan is reportedly likely to be reappointed for a third term as managing director and chief executive of HDFC Bank after external law firms found no merit in the concerns raised by former chairman Atanu Chakraborty in his resignation letter.

According to a report in The Economic Times, the bank’s board is expected to start the formal process for his reappointment, which was pending until the legal review was completed.

The findings also clear the way for the bank to select a new non-executive chairman, it said. Jagdishan’s current term ends in October. Meanwhile, the Reserve Bank of India (RBI) approved a three-month extension for interim part-time chairman Keki Mistry until September 18.

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In a stock exchange filing on June 26, HDFC Bank said Chakraborty’s statement and its implications were not supported by records and witness interviews during the legal review by two law firms. The evidence reviewed was inconsistent with his statement, and no basis for the concerns was found.

Former RBI deputy governor Rajeshwar Rao is among five candidates shortlisted for the chairman’s post, the report added. The bank’s nomination and remuneration committee will refer three names to the RBI for approval. However, board support alone will not guarantee reappointment, as RBI approval remains crucial. Some analysts believe the regulator may consider other factors before clearing a third term. 

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Several factors could affect a straightforward reappointment, such as the bank’s high loan-to-deposit ratio. This is a legacy of the 2023 merger with HDFC Ltd, which added a large mortgage book funded by borrowings rather than deposits. This resulted in a structurally higher credit-deposit ratio compared to peers, and normalising it has been a key challenge during Jagdishan’s second term.