RBI Clears HDFC Bank of Governance Concerns Amid Resignation of Part-Time Chairman

Reserve Bank of India (RBI) Statement on HDFC Bank

Key Highlights

• The RBI has stated that there are no material concerns regarding HDFC Bank's conduct or governance following the resignation of part-time chairman Atanu Chakraborty.
• HDFC Bank is a Domestic Systemically Important Bank (D-SIB) with sound financials, a professionally run board, and a competent management team.
• The bank remains well-capitalised with sufficient liquidity.

RBI Assessment

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The RBI has taken note of the recent developments in HDFC Bank and has approved a transition arrangement regarding the position of part-time chairman. The RBI will continue to engage with the Board and management on the way forward.

HDFC Bank Update

HDFC Bank has announced the resignation of part-time chairman Atanu Chakraborty, citing differences with the lender over "values and ethics". Keki Mistry, a long-time group insider, has been appointed as an interim part-time chairman for three months, effective March 19.

Background

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Atanu Chakraborty was appointed as part-time chairman in April 2021 for a three-year term and reappointed in May 2024 through May 4, 2027. During his tenure, HDFC Bank merged with housing finance firm HDFC Ltd in a $40 billion deal, creating a financial services behemoth. However, Chakraborty noted in his resignation letter that the benefits of the 2022 merger were "yet to fully fructify".