'No Systemic Governance Concerns' at HDFC Bank, Says New Chairman Rajiv Kumar

Newly appointed HDFC Bank Part-Time Chairman Rajiv Kumar on Wednesday assured shareholders that the lender remains fundamentally strong, saying the board is committed to maintaining the highest standards of corporate governance.

Addressing shareholders at the bank's 32nd Annual General Meeting (AGM), Kumar said the board would continue to strengthen oversight, ensure control functions remain fully empowered and deal firmly with any unethical practices on a case-by-case basis.

He acknowledged that large institutions may occasionally face issues but said what matters is addressing them in a timely and transparent manner. "There are no governance-related concerns at the systemic level," Kumar said.

Board Reiterates Governance Commitment

Kumar said the board remains committed to operating HDFC Bank with integrity, transparency, accountability and prudent stewardship.

He said the lender has strong control systems and oversight mechanisms in place. "The Bank has demonstrated that it has control systems and guardrails in place to identify deviations, if any, and the oversight and committee levels are strong," he said.

Kumar also said strong institutions are defined not by the absence of issues but by the strength of their internal processes. According to him, robust governance requires organisations to identify issues internally, investigate them, take corrective action, disclose them where necessary and introduce systemic improvements to prevent recurrence.

Remarks Follow Governance Review

Kumar's comments come months after former part-time chairman Atanu Chakraborty resigned in March, citing certain developments and practices within the bank that he said conflicted with his personal values and ethics.

Following his resignation, HDFC Bank appointed domestic and international law firms to conduct an independent legal review under the supervision of a special committee of independent directors. The review examined board and committee records, interviewed directors and senior executives, and reviewed thousands of documents covering the two years before Chakraborty's exit.

In June, the bank said the review found no evidence supporting the governance concerns raised by Chakraborty. Kumar, who received the Reserve Bank of India's approval to serve as part-time chairman for a three-year term on July 15, said the findings had already been disclosed to stock exchanges. He concluded by reminding shareholders that while building an institution's reputation takes decades, it can be damaged in just a few days, underscoring the board's focus on protecting the bank's credibility.