The Reserve Bank of India (RBI) on Thursday moved to reassure investors and the public about the stability of HDFC Bank, stating there are “no material concerns” regarding the lender’s conduct or governance following the sudden resignation of its part-time chairman, Atanu Chakraborty.
In a statement, the central bank said it has taken note of the recent developments and has approved the transition arrangement proposed by the bank for the position of part-time chairman.
Key Points from RBI Statement
| Aspect | RBI’s Statement |
|---|---|
| Bank Status | HDFC Bank is a “Domestic Systemically Important Bank” with sound financials. |
| Management | Professionally run board and competent management team. |
| Governance | Based on periodic assessment, there are no material concerns on record regarding conduct or governance. |
| Financial Position | The bank remains well-capitalised with a satisfactory financial position and sufficient liquidity. |
“HDFC Bank is a Domestic Systemically Important Bank with sound financials, professionally run board and competent management team,” the RBI said.
It added that, based on its periodic assessment, there are “no material concerns on record regarding the bank’s conduct or governance.”
The Resignation That Sparked Concerns
Chakraborty resigned on March 18, citing in his resignation letter that “certain happenings and practices within the bank” over the past two years were “not in congruence with my personal values and ethics.”
He added that there were no other material reasons behind his decision, but the wording drew significant attention given the lack of specific details.
Management’s Response
Following the development, interim chairman Keki Mistry sought to reassure investors, stating:
- “There had been no discussion with regards to governance within the board.”
- “None of us are aware of the issues raised by Chakraborty.”
- “What happened yesterday has nothing to do with operational profitability.”
- The RBI is “fully in the loop and they are comfortable.”
HDFC Bank CEO Sashidhar Jagdishan echoed a similar stance, saying the bank will “continue to ensure trust on the bank is maintained” and indicating that operations remain stable despite the leadership change.
Transition Arrangement
HDFC Bank had earlier appointed Keki Mistry as interim chairman for a period of three months—a move that has now received regulatory approval from the RBI.
The central bank said it will continue to engage with the bank’s board and management on the way forward.
