India’s largest private sector lender, HDFC Bank, has delayed recommending the reappointment of Managing Director and CEO Sashidhar Jagdishan as its board awaits the outcome of an additional review by independent directors, according to media
Jagdishan’s current term is scheduled to end in October 2026. Under the Reserve Bank of India’s (RBI) regulations, banks are required to submit applications for the reappointment of a CEOor propose fresh candidates at least six months before the end of the incumbent’s tenure. While that timeline has already passed, HDFC Bank’s board has yet to approve its recommendation.
The delay comes months after former HDFC Bank Chairman Atanu Chakraborty resigned unexpectedly in March, citing concerns that certain practices at the bank were inconsistent with his “personal ethics.” His exit triggered governance-related questions among investors.
However, an independent legal review commissioned by the bank and completed last month reportedly found no evidence supporting the governance concerns raised by Chakraborty. The RBI also stated in March that, based on its supervisory assessments, it had “no material concerns” regarding the bank’s governance or conduct.
According to Reuters, the independent directors are examining media reports published earlier this year alleging that HDFC Bank had offered preferential interest rates on certain large deposits, an action that would not be permitted under RBI regulations.
The report notes that the review has not uncovered any wrongdoing so far, and people familiar with the matter expect the exercise to conclude by early August. Once the findings are submitted, the board committee is expected to decide whether to recommend Jagdishan’s reappointment to the central bank.
During the bank’s post-earnings interaction over the weekend, management described the CEO succession process as “a work in progress,” without providing a timeline for the board’s final recommendation.
Analysts believe the uncertainty surrounding the bank’s top leadership has become a key concern for investors. Since Chakraborty’s resignation in March, HDFC Bank shares have declined 7.4%, underperforming the Nifty Bank index, which has gained 4.6% over the same period. Brokerage firm Nuvama Institutional Equities said resolving the leadership uncertainty remains critical for the bank’s valuation.
With the independent review nearing completion, the board’s recommendation on Jagdishan’s future is expected to be closely watched by investors and regulators alike.
FAQs
- Why has HDFC Bank delayed CEO Sashidhar Jagdishan’s reappointment?
The bank’s independent directors are conducting an additional review before the board makes a recommendation to the RBI. - When does Sashidhar Jagdishan’s current term end?
His current term as Managing Director and CEO ends in October 2026. - Has the review found any wrongdoing?
According to Reuters, the review has not found any wrongdoing so far and is expected to conclude by early August. - What triggered the additional scrutiny at HDFC Bank?
The review follows the resignation of former Chairman Atanu Chakraborty and subsequent media reports regarding preferential deposit rates offered to certain customers. - What happens after the review is completed?
The board committee is expected to consider the findings and decide whether to recommend Jagdishan’s reappointment to the Reserve Bank of India.
