The markets were not kind to HDFC Bank after India's largest private sector lender announced the abrupt resignation of its chairman Atanu Chakraborty late on 18 March. Chief executive Sashidhar Jagdishan, who is in the midst of multiple investor meetings, said the market will take some more time to be reassured. In a video interview from the bank’s board room, Jagdishan said that uncertainty arises when one makes an allegation but does not elaborate, hinting at the resignation letter of Chakraborty.
Were investors reassured after you spoke to them?
I think it will take a little bit more time because, unfortunately, they seem to be wondering how to address this uncertainty, because someone has just raised an issue without spelling out the issue. When you raise an issue and if you spell out the issue, then we know what the issue is and we can address it. But when you say there is an issue, but don't spell it out—that is where the uncertainty is. Whatever be the dimension of the issue, we will address it. As long as our conscience is clear, there can be differing views on certain decisions, even in addressing the issues. There is nothing black and white in human nature. The same glass, I will say it is half full, you may say it is half empty. That is the law of nature.
Did the former chairman never raise these issues before?
Yes. As chairman of the board, at the helm of the family, he would know more than what all of us know, or equal to what all of us know. He knows all the issues, whether it is errors and omissions, whether it is operational issues, whether it is regulatory issues, whether it is conduct issues. When he came out with a statement to say that I am resigning because of these two lines, it sort of surprised every board member. We went back to him to say—why do not you just spell it out and we will address it the way we have done in the past. To thi,s he said, “I do not have any issue to share with.”
Does the bank plan to appoint an external auditor to look at these, or even a board committee to investigate?
The board is going to be meeting more frequently to try and see what are the things that we need to take, probably in line with what you are thinking, but that is too premature. There will be several meetings during the course of the week where we may take a collective call on what are the actions to be taken. My hunch tells me that we will take some proactive measures to be able to assess whether there are things that we need to tighten, we need to enhance and be more proactive about it rather than wait for any new or potential issues in the future.
Investors are worried about a couple of future events. One is the appointment of the chairman and the reappointment of the CEO. What do you think?
Am I a willing candidate? Yes. I do not want to comment prematurely on the process, because it is the prerogative of the board and the regulator to provide the necessary approvals, but I am committing that I am willing. Number two is, as regards the chairman, I think as you notice, the regulator has been swift to approve the recommendations of the board's appointment of the interim chairman, Keki Mistry, for a period of 90 days. So, we have 90 days for the board to undertake the process of examining the regulatory requirements for a part-time chairman. It is possible that if Mr. Mistry is eligible and I am talking on behalf of the board, there is a fair amount of people rooting for him to be there.
The former chairman also said that the fruits of the merger (HDFC Ltd and HDFC Bank) are yet to be seen. What do you have to say about that remark?
When you talk about the fruits of the merger, there are points in time. On the day of the merger, you just take a balance sheet, and you merge. Then, you have to ensure that you raise substantial, sufficient deposits to be able to substitute all the borrowings which are maturing, so that it can fund the balance sheet. Now, ever since July 2023, the liquidity environment has never been as benign as how it was prior to that. It has been, actually, for a long period of time, very tight and in the negative zone, and as it started to come up to the positive zone from around April 2025, you started to see the issues emanating out of the trade policies and the impact of the dollar-rupee movement. As per our glide path, from FY26, we will be in line with the system, which we are on track to, at least until December, and then in FY27, we believe we should be growing far faster than the system. We are not a short-term entity.
You mentioned organizational restructuring on an investor call last week. What would that entail? Do you see Kaizad Bharucha (deputy managing director) as a successor?
For me, Kaizad is an equal. He is one of the strongest persons in the banking industry today. He handles the entire asset side of the balance sheet and runs it so efficiently. I would like to think about the process of restructuring as I have done in May 2021 and October 2023. We are equals, and he is already one of the most key members of the organization. So, there is no question of seeing him as a successor.
If what you say is right and there were hardly any issues, then the recent events were completely unnecessary. Would you look at some legal action to be taken?
It is too premature for me to comment, because I would like the broader board to examine this after an expert has given us advice. Frankly, I do not have visibility of that as such; so, my request to you is may be give us some more time for us to get back or know more about it.
The bank has reportedly taken action against some employees on the Credit Suisse additional tier one (AT1) bond issue. Is this related to the chairman’s resignation?
That has nothing to do with the resignation. It was just a coincidence that the accountability action of an issue that was addressed by the disciplinary committee, which had recommended to the Nomination and Remuneration Committee, happened to coincide with that.
