HDFC Bank's Internal Review Finds No Major Governance Lapses: Report

HDFC Bank has not found any major governance issues after an internal review launched following the sudden exit of former chairman Atanu Chakraborty, Reuters reported.

The review was conducted by law firms Trilegal and Wadia Ghandy & Co after Chakraborty resigned in March before the end of his term.

His departure had sparked concerns among investors and market participants because he referred to differences between his personal values and the bank’s culture in his resignation letter.

According to the report, the review examined board discussions, internal communications, and decisions taken over the last three years.

The investigation reportedly concluded that the country’s biggest private lender had followed proper procedures in handling internal matters and did not uncover any significant governance lapses.

The findings are expected to support the continuation of CEO Sashidhar Jagdishan, whose current term ends in October.

The uncertainty surrounding the governance review had delayed clarity over his possible extension.

The review comes at a time when HDFC Bank is under close watch from investors after its merger with Housing Development Finance Corporation in 2023.

Investors have been monitoring the bank’s management stability and governance standards as it works through integration challenges and slower deposit growth.

The Reserve Bank of India had earlier stated that it did not find any material concerns regarding the bank’s financial soundness or governance after Chakraborty’s resignation.

Some reports had indicated that Chakraborty’s exit could have been the result of a leadership clash with CEO Jagdishan.

The positive development sent HDFC Bank shares up by 3 percent in intraday trading on Thursday as investor sentiment improved. The stock later gave up part of the gains but still closed higher.

According to the report, the bank’s board is expected to discuss the review findings soon.