HDFC Bank Likely to Reappoint Jagdishan after Legal Review Clears Ex-Chairman's Concerns

HDFC Bank's board is expected to initiate the process to reappoint Sashidhar Jagdishan for a third term as managing director and chief executive, after two external law firms, Wilson Sonsini Goodrich & Rosati, P C and Wadia Ghandy & Co, found no merit in concerns raised by former non-executive chairman Atanu Chakraborty in his resignation letter, according to a report by The Economic Times.

The bank had held off on formally beginning the reappointment process pending the findings of the legal review.

Jagdishan's current term, which began in 2020 and was extended in 2023 for three years, ends in October 2026. He has said he is "willing" to continue if the board decides to reappoint him, as per the report. Any reappointment will require RBI approval.

Chairman Search Running Parallel

The board is also in the process of selecting a regular non-executive chairman. HDFC Bank received RBI's approval this month to extend the tenure of interim part-time chairman Keki Mistry by three months, until September 18. Mistry, an independent director on the bank's board, stepped in after Chakraborty quit in March, citing that "certain happenings and practices within the bank were not in congruence with his personal values and ethics."

The bank had appointed a talent search firm to identify candidates for the chairmanship but had not finalised a name until now. Notably, the bank's immediate priority is to appoint a regular part-time chairman, with the intention of concluding the process by July 15, or earlier if possible, while the CEO appointment would follow, an earlier report by Business Standard said.

Former RBI Deputy Governor Rajeshwar Rao is among five candidates shortlisted for the chairman's post by the bank's nomination and remuneration committee. The board is expected to refer three names to the RBI for approval. Since the new chairman will be appointed for a five-year term, the bank's view, per the ET report, is that the incoming chairman should have a say in the CEO appointment rather than inherit a pre-made decision.

In a stock exchange filing on June 26, HDFC Bank said the review conducted by two law firms found that Chakraborty's statement and its implications "were not substantiated by the record and witness interviews." The bank added that contemporaneous evidence reviewed was "inconsistent with his statement" and that the review did not identify any basis for it.