RBI Pushes HDFC Bank to Speed Up Chairman Search as Keki Mistry Tenure Nears End

• The RBI has asked HDFC Bank to expedite the process of appointing a non-executive chairman.

• Interim chairman Keki Mistry’s tenure is nearing completion, with uncertainty over an extension.

• The board is also said to be considering multiple names as part of the ongoing selection process.

The Reserve Bank of India (RBI) has reportedly asked HDFC Bank’s board to speed up the search for a non-executive part-time chairman, as interim chairman Keki Mistry’s tenure comes close to ending, according to a Moneycontrol report.

The regulator is understood to be wary that some important decisions may get delayed in the absence of a permanent board chairman.

Mistry is likely to continue in the role until a replacement is appointed, although a formal communication from the RBI is awaited. The process of identifying a new chairman is expected to conclude by the end of June.

The report added that the RBI has been in regular touch with HDFC Bank's board to monitor the progress of the search process and assess how discussions on the appointment are moving forward.

Chairman Search Picks Up Pace

According to the report, the bank's nomination and remuneration committee (NRC) has referred a few names to the board for consideration. Discussions have reportedly been held with some senior former officials and former bankers, though no candidate has been finalised yet.

Under RBI norms, the chairman of a bank's board must be a non-executive and independent director. The report said the formal search process began only in late April, nearly a month after former chairman Atanu Chakraborty stepped down on March 17.

Sources quoted by Moneycontrol said the RBI does not favour a prolonged interim arrangement. While Mistry may continue until a new chairman is appointed, the regulator has reportedly asked the board to speed up the selection process.

The report also noted that Mistry's long association with HDFC Bank and its group entities meant he was not viewed as independent for the purpose of the chairman's role.

CEO Renewal Among Pending Decisions

Several important business and leadership decisions are awaiting board approval, according to people familiar with the matter cited by Moneycontrol.

One of the key decisions is the renewal of Managing Director and Chief Executive Officer Sashidhar Jagdishan's term. Jagdishan is currently serving his second term as MD and CEO, which is scheduled to end in October this year.

According to the report, the RBI believes it would be preferable for the incoming chairman to be involved in the decision regarding Jagdishan's next term, given the importance of alignment between the chairman and the bank's chief executive.

Until a permanent chairman is appointed, the recommendation on Jagdishan's fresh tenure could face delays, the report said.