HDFC Bank Chairman Atanu Chakraborty Quits Over Ethics Row; Stock Slides 5%

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, a process Chakraborty himself described as "momentous" in his letter, while noting that the full benefits of the merger 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 has approved Keki Mistry as interim part-time chairman for a period of three months, starting March 19.

The news hit HDFC Bank's stock hard. Shares fell over 5% in early trade on Thursday, dropping to ₹800.35 on the BSE, making it one of the biggest losers on the benchmark indices for the day. Notably, the shares had plunged 8.66% at a time, opening at ₹770 apiece and hitting a fresh 52-week low.

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 was already underway due to rising crude oil prices and tensions in West Asia.

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.