In a sudden move, HDFC Bank’s part-time chairman and independent director Atanu Chakraborty resigned with immediate effect on Wednesday.
In a letter to the Chairman of the Governance, Nomination and Remuneration Committee, Chakraborty said that some developments and practices in the bank over the last two years did not match his personal values and ethics. He said this was the reason for his resignation. He also confirmed that there were no other reasons behind his decision.
This letter has raised a lot of questions over HDFC Bank. Is something unethical going on in HDFC Bank? Atanu Chakraborty said – Certain happenings and practices within the bank, that I have observed over last two years, are not in congruence with my personal Values and Ethics. This is the basis of my aforementioned decision.
This statement has raised various questions on HDFC Bank. Chakraborty joined the board of HDFC Bank in May 2021. He said his tenure saw major events, including the merger of the bank with HDFC Ltd, which created a large financial group. This merger made HDFC Bank the second-largest bank in India. However, he noted that the full benefits of the merger are yet to be seen.
He also clarified that he is not accusing the bank of any wrongdoing. He said his personal ideologies did not match with the organisation, and therefore it was time to step down.
Reports suggest that there were some concerns within the board about the bank’s functioning for some time. Despite this, Chakraborty thanked the board and senior management for their support and cooperation during his tenure.
After his resignation, HDFC Bank said in an exchange filing that there are no other reasons for his resignation apart from those mentioned in his letter. The bank also appreciated his contribution and wished him success in the future. It also stated that he does not hold directorship in any other company.
Meanwhile, the Reserve Bank of India has approved the appointment of Keki Mistry as the interim part-time chairman of HDFC Bank for three months starting March 19.
Chakraborty is a retired IAS officer from the Gujarat cadre. He has held several important government positions, including Secretary in the Ministry of Finance (Department of Economic Affairs) during 2019–20. In this role, he coordinated economic policymaking and handled the Union Budget process. He also worked in the Department of Expenditure and was involved in infrastructure project evaluation and subsidy management.
He played an important role in updating government financial and procurement rules. In Gujarat, he served in various roles, including heading the Finance Department, and worked on investment policies and development projects.
After his resignation, HDFC Bank shares are expected to remain in focus. The bank’s ADRs in the US fell more than 7% overnight before recovering slightly. In India, the stock fell 4.73% to Rs 800.40 from the previous close of Rs 842.95.
Brokerage firm JPMorgan maintained a “neutral” rating on the stock with a target price of Rs 1,090. It said the stock may remain weak due to the resignation and a softer economic environment.
HDFC Bank shares are currently near their 52-week low. The stock has fallen about 8% in the last one month. The bank has a market capitalisation of around Rs 12.97 lakh crore and is the second-largest bank in India.
