HDFC Bank Legal Review Finds No Evidence Supporting Ex-Chairman’s Ethical Concerns

HDFC Bank has stated that an extensive legal review found no evidence supporting concerns raised by former Chairman Atanu Chakraborty, who resigned in March citing alleged ethical differences with India’s largest private sector lender.

Chakraborty’s unexpected resignation had triggered significant market reaction, wiping out nearly 14% of the bank’s market capitalisation—equivalent to about $16 billion—in the following weeks.

The development also prompted the Reserve Bank of India (RBI) to issue a rare reassurance to investors and depositors regarding the bank’s financial health and governance stability.

The review was conducted by international law firm Wilson Sonsini and Indian law firm Wadia Ghandy.

According to their findings, there was no evidence to substantiate Chakraborty’s claims regarding governance concerns or practices within the bank.

The law firms, in a report submitted to stock exchanges, said that after a detailed investigation, including review of board committee minutes and witness interviews, they found no record of Chakraborty raising concerns that bank practices were misaligned with his personal values or ethical standards.

The probe also found no evidence that he disagreed with board decisions related to the so-called “Dubai matter,” which involved allegations that officials were linked to mis-selling Additional Tier-1 bonds to investors in Dubai.

Chakraborty had earlier suggested that the bank delayed taking corrective action in this matter.

According to the report, the external law firms and the bank made repeated attempts to interview Chakraborty during the review process, but he did not participate in discussions.

Reuters had previously reported that the legal review found no material deficiencies in governance practices or board processes at the bank.

The conclusion of the review now allows HDFC Bank to proceed with its application to the Reserve Bank of India for the reappointment of CEO Sashidhar Jagdishan, whose current three-year term is set to expire in October.

The delay in submitting the CEO reappointment proposal was due to the ongoing legal review. In India, senior appointments at banks require approval from the central bank, making the clearance process critical for leadership continuity.