HDFC Bank’s interim chairman Keki Mistry on Thursday sought to reassure investors that there is “no power struggle” at the lender following the abrupt resignation of part-time chairman Atanu Chakraborty.
Speaking during a conference call with analysts early in the day, Mistry — who has been appointed interim part-time chairman for three months effective March 19 — emphasised that there were no operational concerns at the country’s largest private sector lender by market capitalisation.
“There were no specific operational or other issues that have been highlighted. The board’s oversight mechanism remains fully operational, and our collective commitment to protecting the interests of the institution, depositors, shareholders and all stakeholders is completely and totally unwavering,” Mistry said.
Responding to queries around governance, the 71-year-old industry veteran underlined that he would not have accepted the interim role had there been any compromise on institutional integrity.
“I would not have taken this responsibility at the age of 71 if it did not align with my principles at the level of integrity that I would expect from the bank,” he said.
Surprise move
Board members said they were “baffled” at Chakraborty’s sudden decision to step down, stating that no specific concerns had been formally flagged either prior to or during board discussions.
“None of the board members are aware of the specific issues which Mr. Chakraborty wrote in his letter. The board members asked him yesterday, and he didn’t give any specific explanation,” Mistry said.
He acknowledged that interpersonal differences could arise in any organisation but clarified that there had been no divergence of views at the board level.
“Let me reassure you that in no board meeting has there been any kind of complete differences of opinion, and the minutes will reflect that. Human beings are human beings. There will always be some relationship issues between individuals. Those kinds of things happen. But there is no power struggle in the bank,” he said.
Managing director and chief executive officer Sashidhar Jagdishan said Chakraborty had been requested to reconsider his resignation, elaborate on concerns relating to ethics and moderate the language used in his exit letter.
Chakraborty, a former secretary in the department of economic affairs, had been appointed part-time chairman and independent director in April 2021 for a three-year term and was reappointed in May 2024 for another three-year tenure ending May 2027. He, however, resigned ahead of schedule, citing that certain practices at the bank over the past two years were not aligned with his personal values and ethics.
During his tenure, the board oversaw the merger of HDFC Ltd with HDFC Bank, a transaction that created the second-largest lender in India. Chakraborty, however, noted that the full benefits of the merger are yet to materialise.
Chakraborty told NDTV Profit that he was not alleging wrongdoing. “HDFC Bank is an organisation I nurtured for five years. I am not pointing out any wrongdoings at the bank. My ideologies did not match with the organisation, and hence it was time to part ways,” he reportedly said.
Reappointment of MD
Market speculation has linked his resignation to concerns over the proposed reappointment of Jagdishan as MD and CEO without a formal performance review. Jagdishan’s current term runs until October 26, 2026.
The resignation also comes amid external developments, including allegations by the Lilavati Kirtilal Mehta Medical Trust against the CEO — claims the bank has dismissed as attempts to delay recovery of dues. Separately, the Dubai Financial Services Authority has reportedly restricted the bank’s DIFC branch from onboarding new clients, linked to alleged mis-selling of Credit Suisse’s high-risk AT-1 bonds and onboarding lapses.
Mistry said the nomination and remuneration committee would take an appropriate view on the CEO’s reappointment in due course.
“As regards Sashi’s appointment, it is something that will be considered by the nomination and remuneration committee. At the appropriate time, the committee will meet and take it up at the board. He has been running the bank successfully for the last many years,” he said.
Saurabh Mukherjea, founder and chief investment officer at Marcellus Investment Managers, described the episode as reflective of competing interests in large institutions. “This is power play at the highest levels,” he said on ET Now.