HDFC Bank Engages External Law Firms to Examine Former Chairman Atanu Chakraborty's Resignation

HDFC Bank Governance Review

Company Overview: HDFC Bank, one of India's largest financial services conglomerates, has initiated a review of the resignation letter of former part-time chairman Atanu Chakraborty.

Background: Chakraborty stepped down on March 18, citing differences over "values and ethics". The bank has appointed independent domestic and international law firms to review the resignation letter, ensuring an objective and independent assessment and reinforcing its governance standards.

Key Developments:

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• The Reserve Bank of India has approved the appointment of Keki Mistry as interim non-executive chairman for three months, effective March 19.
• HDFC Bank is reviewing whistleblower complaints received over the past two years, with 747 complaints between FY20 and FY25, and action taken in 55 cases in FY24 and 41 cases in FY25.
• Three senior executives have exited the bank as part of an internal probe into the alleged mis-selling of Credit Suisse's Additional Tier-1 bonds.
• Shares of the bank have fallen nearly 12% since Chakraborty's exit.

Governance Concerns: The sequence of events has raised questions around governance, despite the bank maintaining that there are no "material concerns" or internal power struggles. The review of Chakraborty's resignation letter is aimed at reinforcing the bank's governance standards.

Financial Performance: HDFC Bank's merger with HDFC Ltd in 2021 created a $40-billion financial services conglomerate. The bank remains "systemically important, financially sound, and professionally managed", according to the Reserve Bank of India.