Power Struggle Between Chairman Atanu Chakraborty And CEO Sashidhar Jagdishan Led To Former’s Exit: Report

HDFC Bank chairman Atanu Chakraborty resigned due to a power struggle with Chief Executive Officer (CEO) Sashidhar Jagdishan.

While Chakraborty had cited ethical reasons for his resignation, the Financial Times reported that the leadership clash emerged due to differing working styles and decision-making, which resulted in his exit from India’s largest private sector lender.

The unease between the two executives led to Chakraborty opposing the renewal of Jagdishan’s tenure as CEO. Chakraborty was not in favour of extending his term, while most board members supported the renewal, according to the report.

This was one of the key reasons behind Chakraborty’s resignation, the report said, citing sources.

Differences between Chakraborty and Jagdishan dated back to the issue of selling stakes in subsidiary HDB Financial Services.

While Jagdishan supported selling a minority stake in the business to Mitsubishi UFJ Financial Group in 2024, Chakraborty held the opposite view. However, the proposal did not go through, and the company was eventually listed.

The top executives also had different working styles. Chakraborty used to get involved in the bank’s day-to-day operations. He engaged closely in decisions such as promotions and staff interactions, which was considered unusual for a non-executive chairman.

On the other hand, Jagdishan had a low-key approach to managing issues.
The upheaval in the bank’s top leadership has left investors concerned about the near-term prospects of the bank. This has also affected the lender’s stock performance.

The stock of HDFC Bank has largely remained on a losing streak since Chakraborty’s resignation on March 18. The stock has lost almost 10 percent, declining from Rs 843 apiece to Rs 760.

The stock was trading 2.8 percent lower during Friday’s trade. The steep decline has come even as the bank tried to assure investors and regulators about governance standards.

“The bank operates with strong governance standards, robust internal controls, and an extremely experienced management team. Our strategic direction, business priorities, and execution capabilities continue to remain as always,” said Keki Mistry, the bank’s interim chairman, during a recent investors’ call.