₹1 Lakh Cr Wiped Out in Minutes! HDFC Bank Chairman Atanu Chakraborty's Exit Triggers Market Mayhem

HDFC Bank's part-time Chairman Atanu Chakraborty has stepped down from his position with immediate effect, citing concerns about the way the bank operates internally.

In his resignation letter, Chakraborty said that certain practices he had observed at the bank over the past two years did not align with his personal values and ethics. He did not, however, point to any specific incidents or issues.

The timing of his exit has put the spotlight on the bank’s governance standards, as the lender is still in the middle of absorbing its merger with HDFC Limited. Chakraborty himself described the merger as "momentous" in his letter, while noting that the full benefits of the process are yet to be realised.

The bank confirmed the resignation through a regulatory filing, stating that no reasons exist for the departure beyond what Chakraborty mentioned in his letter. It also announced that the Reserve Bank of India (RBI) has approved Keki Mistry as interim part-time chairman for a period of three months, starting March 19.

Stock Tanks, Worst Day Since COVID Crash

The news hit HDFC Bank's stock hard. Shares of the lender plunged as much as 9% at the open on Thursday, hitting a fresh 52-week low of ₹770 apiece and wiping out over ₹1 lakh crore in market capitalisation within minutes.

The stock later pared some losses to trade around 5% lower at ₹800.35 on the BSE,though the damage remained significant, making it one of the biggest losers on the benchmark indices for the day.

The bank's market cap dropped to a little over ₹11.85 lakh crore at its worst point during the session. If the losses hold, Thursday's fall would mark the stock's worst single-day performance since the COVID-19 crash of 2020, when HDFC Bank shares had tumbled nearly 13%.

Notably, the bank's stock fell sharper than its peers, suggesting that investors were reacting specifically to the chairman's resignation, over and above a broader market dip that is already underway due to rising tensions in West Asia.

Additionally, the American Depository Receipts (ADRs) of HDFC Bank closed trading 7.5% lower.

Seeking to settle investor nerves, Mistry addressed a call with investors, saying there are "no major issues" at the bank and that the resignation was not connected to any operational or governance problems.

Who is Atanu Chakraborty?

Chakraborty is a retired Indian Administrative Service (IAS) officer from the Gujarat cadre, with over three decades of experience in public policy and financial administration.

He previously served as Secretary in the Department of Economic Affairs under the Ministry of Finance, and also held roles in the Department of Investment and Public Asset Management, where he was part of the government's disinvestment programme.

After retiring from civil services, he transitioned into corporate board roles. He joined HDFC Bank's board in May 2021 as an independent director and subsequently became its part-time chairman. His time at the bank overlapped with the landmark merger between HDFC Bank and HDFC Ltd.

Who is Keki Mistry?

The RBI has approved 71 year old Keki Mistry as the interim part-time chairman of the bank. Mistry is a banking veterean, who joined HDFC Ltd in 1981 and has since spent 42 years at the firm, rising to serve as its Vice Chairman and CEO before its merger with HDFC Bank.

Before that, he had worked as an accounts manager at Indian Hotels Company Limited (IHCL) for two years.

According to the lender's website, Mistry is a Chartered Accountant and Fellow Member of the Institute of Chartered Accountants of India. He also chairs Sebi's Primary Market Advisory Committee (PMAC) and serves as Co-Chair of the B20 (South Africa 2025) Task Force on Integrity and Compliance.