Chakraborty’s sudden exit raised governance questions: HDFC MD

HDFC Bank MD and CEO Sashidhar Jagdishan on Saturday said abrupt resignation of part-time chairman Atanu Chakraborty was a challenging event and it led to questions about governance standards at the bank.

Chakraborty resigned as a part-time chairman of the country’s biggest private sector lender on March 18, more than a year before his term came to an end, citing ethical concerns. This is the first time a part-time chairman of HDFC Bank has left midway, raising concerns about its functioning.

“Towards the end of the Financial Year 2025- 26, the bank faced a challenging event with the resignation of Atanu Chakraborty, part-time chairman and independent director of the bank, on March 18, 2026,” Jagdishan said in the annual report of the bank released on Saturday.

The statement mentioned in Chakraborty’s resignation letter led to questions about governance standards at the bank, he said. To reinforce the robust governance standards of the bank, he said, the board of directors of the bank took the proactive step of appointing external law firms to conduct a review regarding the statement made by Chakraborty in his 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, he said.

The bank, on June 26, 2026, shared the findings of the external law firms, which, in essence, were that Chakraborty’s statement in his resignation letter and its implications were not substantiated by the record reviewed and witness interviews, he said.

Welcoming the new part-time chairman, Rajiv Kumar, he said, Kumar has played a transformational role in revitalising the banking and financial services sector of the country as a Financial Services Secretary and later as Finance Secretary.

Kumar also drove growth-oriented and inclusion-focused initiatives within the financial system, he said.

As Secretary, Department of Financial Services (2017-2020), he assumed charge at a time when public sector banks were grappling with high levels of unrecognised NPAs, capital inadequacy, lenders frozen out of fresh credit, gold plating being rampant, equity and debt being diverted and recirculated to leverage fresh credit, governance challenges including large consortiums, NBFCs struggling to fill micro credit gaps post demonetization, Ponzi schemes defrauding citizens, etc.

Jagdishan assured shareholders that the 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. Our subsidiaries have played a pivotal role in the HDFC Bank Group's emerging as a comprehensive financial services conglomerate. During the year, we placed greater emphasis on ensuring each entity operates with strong governance foundations, strategic clarity, and a unified approach to risk and conduct,” he said.

Engagements under the Inter-Regulatory Forum provided valuable cross-entity insights, helping drive greater standardisation across governance frameworks and strengthen alignment on key oversight themes, he said.

Talking about performance of the lender, Jagdishan said the bank too has continued on an upward path with an increase in advances, deposits, profitability while maintaining its traditionally strong asset quality.

“We will continue to focus on our risk management framework, leverage technology, particularly AI, for an enhanced customer experience.

“The measure of a bank is not only how it performs in favourable conditions but how consistently it serves its customers, communities and shareholders through every cycle. Having delivered on this thus far, we retain our focus on it for the future too,” he said.

“I would like to thank members of the Bank’s Board, our regulators and all other stakeholders for their support,” he added.