HDFC Bank Review Finds No Major Governance Concerns After Chairman's Exit

HDFC Bank’s internal governance review has not identified any major lapses following the resignation of chairman Atanu Chakraborty earlier this year, Reuters reported.

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The review was conducted by law firms Trilegal and Wadia Ghandy & Co after Chakraborty stepped down in March 2026, citing “incongruence” between his personal values and certain practices within the bank.

The findings are expected to clear the way for the proposed reappointment of managing director and chief executive officer Sashidhar Jagdishan, whose current term ends in October 2026.

Reuters reported that according to people aware of the matter, the legal review examined board meeting records, video recordings, and minutes of meetings conducted over the past three years.

The review focused on whether governance-related concerns were raised at the board level and whether those issues were addressed according to prescribed processes.

Reuters reported that sources said the law firms are likely to submit their findings to the HDFC Bank board later this month. The report is also expected to be shared with the Reserve Bank of India as part of the process related to CEO reappointment approvals.

Chairman's Resignation Had Triggered Market Volatility

The resignation of Atanu Chakraborty in March had led to a sharp reaction in the stock market. Following the announcement, HDFC Bank shares declined 13.81%, resulting in an erosion of nearly $16 billion in market value.

The development also prompted a statement from the Reserve Bank of India, which said there were no material governance concerns on record related to the bank. HDFC Bank is India’s largest private sector lender by assets and serves nearly 120 million customers.

CEO Reappointment Process In Focus

People familiar with the matter said the bank is expected to formally propose the reappointment of Sashidhar Jagdishan after the review process is completed. The Reserve Bank of India approves appointments and extensions of chief executive officers at banks.

Sources told Reuters that the central bank currently does not see any issue that could prevent the extension of Jagdishan’s term, subject to the final review findings.

HDFC Bank, the Reserve Bank of India, Trilegal, and Wadia Ghandy & Co did not issue official comments on the matter.

Stock Performance And Market Context

HDFC Bank stock continues to attract attention since the time the governance evaluation process commenced in early 2023. HDFC Bank stock has lost almost 5% since the merger with HDFC Limited last year. During the same period, ICICI Bank shares have gained around 33%, while the Nifty 50 index has advanced approximately 24%.

On May 6, HDFC Bank shares rose 3.1% during trading after reports related to the governance review emerged. Indian benchmark indices also ended higher during the session. The Sensex settled at 77,958.52, registering a gain of 1.22%. The Nifty 50 index rose 1.24% and ended at 24,330.95.

The corporate governance assessment of HDFC Bank, as well as its continuity of management, is constantly monitored by regulators and stakeholders alike owing to the bank’s market stature.