Independent law firms’ review has found no major governance lapses at HDFC Bank after the chairman’s sudden exit.
This outcome paves the way for the reappointment of CEO Sashidhar Jagdishan, easing leadership uncertainty.
The dramatic resignation initially rattled markets but is now heading toward a quiet resolution.
HDFC Bank is likely to get a clean chit this month from two law firms that were brought in to review its governance after its part-time chairman stepped down, Reuters reported.
The development clears the path for the reappointment of CEO Sashidhar Jagdishan, whose tenure has been hanging in the balance since March.
1 May 2026
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What Triggered the Review
The crisis began when Atanu Chakraborty resigned as HDFC Bank's part-time chairman in March, citing "incongruence" between his personal values and bank practices, without elaborating further.
Mumbai-based law firms Trilegal and Wadia Ghandy & Co were subsequently brought in to examine the bank's governance.
The resignation sent shockwaves through the market.
The late-night disclosure by the bank on the resignation led to a massive sell-off in HDFC Bank's stock in early morning trade. The scrip nosedived nearly 9% in early trading session. This was even after the bank had tried to assure investors by appointing Keki Mistry, a veteran HDFC banker, as the interim part-time Chairman.
The early sell-off was somewhat contained intraday. But still, it wiped out about ₹1 lakh crore in market value of the bank. At its worst point, the bank's market capitalisation dropped to a little over ₹11.85 lakh crore.
The RBI even took the rare step of issuing a public statement to reassure investors and depositors about the stability of a lender considered "too big to fail".
What the Review Found
The law firms examined minutes and video recordings of board and extraordinary general meetings over the past three years, specifically looking at whether Chakraborty had raised governance concerns and how those were addressed, the report said.
The firms are expected to submit their report to the board this month, which will then forward it to the RBI.
With the review nearing conclusion, HDFC Bank is expected to formally propose Jagdishan for reappointment once the law firms submit their findings. His current three-year term ends in October, and the central bank must approve the reappointment.
Notably, the RBI sees no issues that could block the reappointment. The RBI had also previously stated that its periodic assessments found "no material concerns on record as regards its conduct or governance."
The governance episode has highlighted leadership strain at HDFC Bank, which has underperformed since its $40 billion merger with parent HDFC Ltd in 2023. The bank's stock is down 5% since the merger, while closest rival ICICI Bank has risen 33% and the benchmark Nifty 50 is up 24% in the same period.
Proxy advisor InGovern Research Advisory Services said last month that Chakraborty's resignation was likely driven by individual personality differences rather than any threat to shareholder value.
