RBI sees no governance concerns at HDFC Bank, points to 'sound financials, professionally run board'

The Reserve Bank on Thursday said it has taken note of recent developments at HDFC Bank following the resignation of its part-time chairman Atanu Chakraborty, and asserted that there are no "material concerns" regarding the lender’s governance or conduct.

In a statement, the Reserve Bank of India (RBI) said it has approved a transition arrangement for the position of part-time chairman as requested by the bank.

“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 central bank said.

“The bank remains well-capitalized and the financial position of the bank remains satisfactory with sufficient liquidity,” it added.

The clarification comes a day after Chakraborty stepped down from his role, citing ethical concerns.

In his resignation letter dated March 17, he said certain developments and practices within the bank over the past two years were “not in congruence” with his personal values.

HDFC Bank, in a regulatory filing, said the resignation was received on March 18 and was effective immediately.

Chakraborty had been serving as part-time chairman since May 2021, after retiring as Secretary of the Department of Economic Affairs.

Following his exit, the RBI has approved the appointment of Keki Mistry as interim part-time chairman for a period of three months, effective March 19, 2026.

Seeking to reassure investors, Mistry said there were “no major issues” at the bank and that the resignation was not linked to any operational or governance concerns.

“There are no material matters for the resignation,” he said during an investor call on Thursday morning.

During Chakraborty’s tenure, HDFC Bank completed its merger with parent HDFC Ltd in July 2023, creating a financial conglomerate with a combined balance sheet exceeding ₹18 lakh crore.

"I joined the Board of HDFC Bank in May 2021. My tenure on the Board saw momentous events like the merger of the bank with HDFC Ltd that created a conglomerate under the bank. This strategic initiative made HDFC bank the second largest Bank in the country. Though, the benefits of merger are yet to fully fructify," he said in his resignation letter.