Stock hits 52-week low; bank’s board may approach M Rajeshwar Rao, former Deputy Governor of RBI, to replace Chakraborty
The sudden departure of Atanu Chakraborty as Part-time Chairman and Independent Director of HDFC Bank with immediate effect has stirred a hornet’s nest, with its stock taking a beating amid reports of a “power struggle”, which the bank’s board strongly refuted. The RBI, backed the bank, stated that there are no material concerns on record about its conduct or governance.
Chakraborty, who was Part-time Chairman of India’s largest private sector bank since May 2021, put in his papers citing “certain happenings and practices within the bank, that I have observed over last two years, are not in congruence with my personal values and ethics”, as the basis for his decision to step down.
In his resignation letter, the Gujarat-cadre IAS officer, who retired as the Department of Economic Affairs Secretary in the Government of India in 2020, also observed that the benefits of the 2023 merger (of HDFC with HDFC Bank) are yet to fully fructify.
Banking sector experts say the bank’s board may approach M Rajeshwar Rao, former Deputy Governor of RBI, to replace Chakraborty. The role of Deputy Managing Director, Kaizad Bharucha is also set to expand, according to Keki Mistry, who said that he would be getting more responsibilities, in addition to his current functions.
The bank, in a regulatory filing, said based on its application the Reserve Bank of India on March 18, has granted its approval for the appointment of Keki Mistry as interim Part-time Chairman of the bank with effect from March 19 for three months.
HDFC Bank’s stock hit a 52-week low at ₹772 per share on Thursday on BSE. It closed at ₹779.70 apiece, down 5.13 per cent (or ₹43.25)
Addressing analysts, Mistry emphasised that there is no “power struggle” in HDFC Bank, and some relationship issues will always be there between individuals in any organisation. Chakraborty’s exit comes amid reports that he insisted on a review of the bank chief’s tenure before recommending a further extension of his tenure, and alleged strain in relationship between some of the CXOs.
Sashidhar Jagdishan has been helming the bank as MD & CEO since October 27, 2020. His second three-year term ends in October 2026. Mistry said: “And believe me…at the age of 71, I would not take on this responsibility [as Interim Chairman] for three months if the systems, processes and governance practices in the bank do not align with my principles and my level of integrity…RBI gave their approval for making me Interim Chairman for a period of three months just to stabilise things and then move on.”
Replying to a specific question on the possibility of a “power struggle” in an analyst call, Mistry said: “Differences on minor issues do come up from time to time, but there was nothing material whatsoever..There will always be some relationship issue between individuals. Those kind of things happen. There was no power struggle in the bank, as you put it”.
Renu Sud Karnad, Non-Executive (Non-Independent) Director, said: “In fact, we repeatedly asked him [Chakraborty] to tell us why, what had triggered this [resignation], and if there was anything we have to do to get it right. But he said there was nothing. And that was a bit baffling.”
Mistry observed that there has never ever been any kind of discussion at the board level on any matter that is contentious in terms of governance.
“If there have been any minor issues here and there, those have been tackled appropriately. .What caused that [resignation] letter to be sent yesterday is something which really, to my mind, defies logic,” he said.
The RBI emphasised that HDFC Bank is a Domestic Systemically Important Bank (D-SIB) with sound financials, professionally run board and competent management team.
“Basis our periodical assessment, there are no material concerns on record as regards its conduct or governance. The bank remains well-capitalized and the financial position of the bank remains satisfactory with sufficient liquidity.
“Reserve Bank will continue to engage with the Board and management on the way forward,” the central bank said in a statement.
Published on March 19, 2026
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