Resignation of part-time chairman a challenging event; raised questions on lender's governance standards: HDFC Bank MD and CEO Jagdishan

HDFC Bank's managing director and CEO Sashidhar Jagdishan has termed the resignation of Atanu Chakraborty, the part-time chairman, on March 18, was a challenging event. He has stressed that the lender remains committed to the highest standards of corporate governance.

Chakraborty had resigned as the part-time chairman of the country's second largest lender, citing that “certain happenings and practices” within the bank observed over two years, were “not in congruence” with his personal values and ethics.

"The statement mentioned in Chakraborty’s resignation letter led to questions about governance standards at the bank," Jagdishan said in the annual report for 2025-26.

The board later appointed external law firms to review the statement made by Chakraborty in the resignation letter.

"Since the ADRs of the bank are listed on NYSE, the board considered it prudent to engage both, domestic and international law firms for the purpose of this review," Jagdishan noted.

The board also constituted a special committee comprising independent directors, to provide oversight on the legal review and ensure appropriate and timely flow of information between the bank and the law firms.

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According to Jagdishan, the exercise involved review of voluminous minutes, materials, communications, and interviews of all the independent directors and several members of senior management, including myself and heads of certain control and assurance functions, since the period under review was two years before Chakraborty's resignation.

The external review concluded that the statement in his resignation letter and its implications were not substantiated by the record reviewed and witness interviews.

Jagdishan stressed in the annual report that HDFC Bank remains committed to the highest standards of corporate governance.

"We continued to enhance our internal frameworks and refresh key control processes as a part of the organisation’s journey," he said.

HDFC Bank's board recently appointed former IAS officer and ex-Chief Election Commissioner Rajiv Kumar as the part-time chairman and independent director.

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Welcoming him, Jagdishan said that "over the span of a very distinguished career as a public servant, Kumar has played a transformational role in revitalising banking and financial services sector of the country. He also drove growth-oriented and inclusion-focused initiatives within the financial system."

In his letter to shareholders the MD and CEO also touched upon the merger of parent mortgage lender HDFC and HDFC Bank three years ago, which was one of the major decision taken under his leadership.

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"The mortgage business continues to become stronger and we are among the top two players in the country in the mortgage business," said Jagdishan.

HDFC Bank has been able to open savings bank accounts for over 95 per cent of the new to bank home loan customers by the time of disbursement and cross sell is at a healthy level, he said.

Jagdishan also pointed that technology was increasingly at the heart of the bank's operations.

It has embedded intelligence directly into systems, workflows and decision making, instead of treating it as a standalone capability.

"A key enabler has been the development of our in-house foundational, platform-led model, Neev. This provides a unified base for developing and deploying AI capabilities across the bank, ensuring consistency, reuse and alignment with enterprise standards," said Jagdishan.

The bank is also continuing to strengthen its cyber security at a time digital threats are becoming "more sophisticated and less predictable," according to Jagdishan.

He said he is an "incorrigible optimist on the long term prospects of the Indian economy."

The lender will continue to focus on our risk management framework, leverage technology, particularly AI, for an enhanced customer experience, he stated.

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