On HDFC Bank’s board since May 2021, Atanu Chakraborty quit as part-time Chairman last night, with his letter citing developments over the last two years, that “were not congruent with his personal values and ethics.”
Sources also said that the regulator has raised no concerns with the bank, stating that there is “nothing wrong with HDFC Bank or its conduct.”
There have been no governance red flags, no regulatory action, no NPA or compliance-linked issues, that triggered Chakraborty’s departure, the sources said, going on to further add that neither the RBI, nor the bank initiated or directed his departure and that it was an individual-level decision.
The real friction stemmed from Chakraborty’s functioning in an “executive style”, despite him holding a non-executive role and his exit is linked to personal differences with the senior management, the sources went on to add.
While Chakraborty’s differences with the board had been building for a while, his resignation came as a surprise to the board, according to the same sources, who said that the board meeting was called at a short notice last night, where Keki Mistry was asked to step in for stability, until a new chairman is found.
Chakraborty has not detailed specific reasons to the board beyond what has been stated in his exit letter and that he may have had issues with the conduct of certain individuals linked to past lapses at the bank. Whether those concerns were formally raised or documented internally, remains unclear, sources said.
HDFC Bank’s US-listed shares reacted to this development overnight, declining as much as 7.5%. The stock has among the largest weightages on the Nifty 50 and the Nifty Bank index.
