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Months after a surprise boardroom exit raised questions over governance at HDFC Bank, the lender is preparing to back CEO Sashidhar Jagdishan for another three-year term, The Economic Times reported. Independent legal reviews have found no basis for the allegations raised by former chairman Atanu Chakraborty, shifting the focus to the Reserve Bank of India (RBI), whose approval will determine whether Jagdishan continues at the helm.
According to a report by The Economic Times, HDFC Bank is expected to begin the process of reappointing Jagdishan after the independent review cleared the management of the concerns raised earlier this year. The board is likely to support his continuation, but the final decision will rest with the central bank, which must approve the appointment of the chief executive of India's largest private-sector lender.
The development comes at a crucial time for HDFC Bank, which is still navigating the integration of HDFC Ltd after the landmark 2023 merger while also searching for a permanent non-executive chairman.
The reappointment process had been kept on hold pending the outcome of an independent legal review into allegations made by former non-executive chairman Atanu Chakraborty, who resigned in March citing concerns over certain practices within the bank.
In a stock exchange filing on June 26, HDFC Bank said the review conducted by US-based law firm Wilson Sonsini Goodrich & Rosati and Indian law firm Wadia Ghandy & Co concluded that Chakraborty's statements were "not substantiated" by documentary evidence or witness interviews.
The bank said contemporaneous records examined during the review were inconsistent with the allegations and that the investigation found no basis for the claims.
The findings are expected to remove one of the biggest uncertainties surrounding Jagdishan's future at the bank.
According to The Economic Times, HDFC Bank's board is now expected to formally begin the process of recommending Jagdishan for another three-year term.
Jagdishan's current tenure ends in October 2026. He first took charge in 2020 after Aditya Puri retired, and his term was extended once in 2023.
The CEO has previously indicated that he would be willing to continue if the board decides to reappoint him.
Even if the board backs Jagdishan, the appointment cannot proceed without RBI approval.
"The law firms' clean chit to the board bolsters Jagdishan's chances of being reappointed for another three-year term by both the board and the RBI," Suresh Ganapathy, Head of Financial Services Research at Macquarie Capital, told The Economic Times.
"The fact that the law firms found no evidence on the issues raised by the former chairman indicates that right processes were followed, and it would be unfair to single out the CEO in such matters," he said.
However, some analysts believe the central bank could take a broader view before clearing a third term.
"While the HDFC Bank board wants another term for Jagdishan, the ball now lies in the regulator's court on how it views the events of the past year," Asutosh Misra, Head of Research at Ashika Group, told ET.
He added that the lender has a strong leadership bench, with Deputy CEO Kaizad Bharucha also viewed as a capable leader.
Beyond governance, the RBI is also likely to assess the bank's operational performance since the merger with mortgage lender HDFC.
The merger significantly increased HDFC Bank's loan book but also left it with a structurally elevated loan-to-deposit ratio, as the acquired mortgage portfolio had been funded largely through borrowings rather than deposits.
Reducing that ratio has become one of the defining challenges of Jagdishan's second term.
The bank has spent the past two years aggressively mobilising deposits and recalibrating balance-sheet growth, but analysts say the transition remains a work in progress.
The CEO succession process is unfolding alongside the search for a permanent non-executive chairman.
Earlier this month, the RBI approved a three-month extension for interim part-time chairman Keki Mistry until September 18.
According to ET, the bank's nomination and remuneration committee has shortlisted five candidates for the chairman's role. Former RBI Deputy Governor Rajeshwar Rao is among those being considered, while the board is expected to send three names to the RBI for final approval.
Reports suggest the bank would prefer its incoming chairman to have a say in the CEO appointment rather than inherit a decision already made.
A third term for Jagdishan would signal leadership continuity at a time when HDFC Bank is focused on completing the integration of HDFC Ltd, improving deposit growth and restoring key balance-sheet metrics after India's biggest banking merger.
But until the RBI gives its approval, one of the country's most closely watched leadership decisions in the financial sector remains unfinished.
According to a report by The Economic Times, HDFC Bank is expected to begin the process of reappointing Jagdishan after the independent review cleared the management of the concerns raised earlier this year. The board is likely to support his continuation, but the final decision will rest with the central bank, which must approve the appointment of the chief executive of India's largest private-sector lender.
The development comes at a crucial time for HDFC Bank, which is still navigating the integration of HDFC Ltd after the landmark 2023 merger while also searching for a permanent non-executive chairman.
Legal review clears governance concerns
The reappointment process had been kept on hold pending the outcome of an independent legal review into allegations made by former non-executive chairman Atanu Chakraborty, who resigned in March citing concerns over certain practices within the bank.
In a stock exchange filing on June 26, HDFC Bank said the review conducted by US-based law firm Wilson Sonsini Goodrich & Rosati and Indian law firm Wadia Ghandy & Co concluded that Chakraborty's statements were "not substantiated" by documentary evidence or witness interviews.
The bank said contemporaneous records examined during the review were inconsistent with the allegations and that the investigation found no basis for the claims.
The findings are expected to remove one of the biggest uncertainties surrounding Jagdishan's future at the bank.
Board expected to recommend another term
According to The Economic Times, HDFC Bank's board is now expected to formally begin the process of recommending Jagdishan for another three-year term.
Jagdishan's current tenure ends in October 2026. He first took charge in 2020 after Aditya Puri retired, and his term was extended once in 2023.
The CEO has previously indicated that he would be willing to continue if the board decides to reappoint him.
RBI approval remains decisive
Even if the board backs Jagdishan, the appointment cannot proceed without RBI approval.
"The law firms' clean chit to the board bolsters Jagdishan's chances of being reappointed for another three-year term by both the board and the RBI," Suresh Ganapathy, Head of Financial Services Research at Macquarie Capital, told The Economic Times.
"The fact that the law firms found no evidence on the issues raised by the former chairman indicates that right processes were followed, and it would be unfair to single out the CEO in such matters," he said.
However, some analysts believe the central bank could take a broader view before clearing a third term.
"While the HDFC Bank board wants another term for Jagdishan, the ball now lies in the regulator's court on how it views the events of the past year," Asutosh Misra, Head of Research at Ashika Group, told ET.
He added that the lender has a strong leadership bench, with Deputy CEO Kaizad Bharucha also viewed as a capable leader.
Post-merger challenges remain
Beyond governance, the RBI is also likely to assess the bank's operational performance since the merger with mortgage lender HDFC.
The merger significantly increased HDFC Bank's loan book but also left it with a structurally elevated loan-to-deposit ratio, as the acquired mortgage portfolio had been funded largely through borrowings rather than deposits.
Reducing that ratio has become one of the defining challenges of Jagdishan's second term.
The bank has spent the past two years aggressively mobilising deposits and recalibrating balance-sheet growth, but analysts say the transition remains a work in progress.
Chairman appointment running in parallel
The CEO succession process is unfolding alongside the search for a permanent non-executive chairman.
Earlier this month, the RBI approved a three-month extension for interim part-time chairman Keki Mistry until September 18.
According to ET, the bank's nomination and remuneration committee has shortlisted five candidates for the chairman's role. Former RBI Deputy Governor Rajeshwar Rao is among those being considered, while the board is expected to send three names to the RBI for final approval.
Reports suggest the bank would prefer its incoming chairman to have a say in the CEO appointment rather than inherit a decision already made.
A third term for Jagdishan would signal leadership continuity at a time when HDFC Bank is focused on completing the integration of HDFC Ltd, improving deposit growth and restoring key balance-sheet metrics after India's biggest banking merger.
But until the RBI gives its approval, one of the country's most closely watched leadership decisions in the financial sector remains unfinished.
