Review of India’s HDFC Bank finds no major governance concerns after chairman exit, sources say

Law firms examining HDFC Bank’s governance are expected to release their findings this month, stating that no serious shortcomings were identified, according to two sources familiar with the review, paving the way for the CEO’s possible reappointment.

India’s biggest private sector lender by assets engaged Mumbai‑based Trilegal and Wadia Ghandy & Co after chairman Atanu Chakraborty stepped down in March, saying his personal values clashed with the bank’s practices, without giving further details.

His departure triggered a 13.81% slide in the bank’s share price, wiping roughly $16 billion off its market value, and led the central bank to issue an uncommon statement aimed at easing worries among investors and depositors about a lender considered too big to fail.

The episode also cast uncertainty over the bank’s pending request to the central bank, due at the end of May, to re‑appoint CEO Sashidhar Jagdishan.

The incident highlighted leadership tensions at HDFC, a bank chiefly held by foreign institutional investors that has seen its shares fall about 5% after a $40 billion merger with parent HDFC Ltd in 2023. Over the same period, rival ICICI Bank gained 33% while the Nifty 50 climbed 24%.

Serving 120 million customers and holding just over one‑tenth of the nation’s deposits, a favorable assessment from the law firms would provide much‑needed confidence in a bank whose stability is vital to the economy.

The firms reviewed board minutes and video recordings of ordinary and extraordinary general meetings from the past three years to determine whether Chakraborty had raised governance concerns and, if so, how they were handled, the sources said, requesting anonymity because the findings are not public.

According to one source, any governance matters raised at the board level were dealt with in line with established procedures, though no further detail was provided.

The law firms expect to deliver their report to the board this month; the board will then forward it to the central bank, the source added.

These review findings have not been disclosed before.

Chakraborty did not reply to Reuters’ texted questions, and HDFC Bank, the Reserve Bank of India, Trilegal and Wadia Ghandy & Co. gave no response to emailed requests for comment.

BANK SET TO PROPOSE CEO REAPPOINTMENT

The resignation and ensuing review postponed the board’s decision on whether to endorse Jagdishan for another term as CEO after his current three‑year stint concludes in October, given that the central bank must sanction lenders’ CEO appointments.

HDFC Bank intends to nominate Jagdishan for re‑appointment once the law firms’ report is submitted, a second source said.

A third source, familiar with the RBI’s stance, said the central bank sees no obstacles to Jagdishan’s re‑appointment, adding that if the review confirms this view, the RBI would readily back the move.

Following Chakraborty’s resignation, the central bank noted, based on its periodic assessment, that ‘there are no material concerns on record concerning the bank’s conduct or governance.'”

Last month, proxy adviser InGovern Research Advisory Services noted that the resignation appeared to stem from personal differences rather than any risk to shareholder value.

Published on May 6, 2026