The unexpected resignation of Atanu Chakraborty as chair of one of India’s biggest banks stemmed from a power struggle with chief executive Sashidhar Jagdishan, a report by Financial Times said quoting multiple people familiar with the matter.

Chakraborty, the non-executive chair of HDFC Bank since 2021, quit abruptly last week with a resignation letter alluding to “ethical differences” between him and the lender.

His mysterious departure prompted concern about the health of the bank but while there were tensions over compliance, the root cause was a clash of strategy, personality and leadership style, according to bankers FT spoke to.

The tension appears to have come to a head over the impending reappointment of Jagdishan, whose term is due for renewal subject to regulatory approval. Several people said Chakraborty opposed extending the chief executive’s tenure, while most of the board backed him.

“The chair was opposed to the renewal,” said a senior Mumbai banking figure. Another said friction over the reappointment “looks to be the crux of the matter”.

Strategic differences between the two men go back as far as the spin-off of HDB Financial Services, an important subsidiary. Jagdishan backed the potential sale of a minority stake to Japan’s Mitsubishi UFJ Financial Group in 2024. Chakraborty opposed the plan, and the deal became a victim of his “war” with the chief executive, one person said. The business was listed last year instead.

“There was discord for quite some time,” said one shareholder.

Since taking over as CEO in 2020, Jagdishan has avoided the limelight. By contrast, Chakraborty’s hands-on approach for a non-executive chair is alleged to have grated with management, which was used to operational freedom.

Jefferies holding

International brokerage Jefferies exited its holdings in shares of private lender HDFC Bank, while trimming its India weightage. For all the portfolios, the brokerage decided to include an investment in HSBC with a 4 per cent weighting.