RBI said it found no material governance or conduct concerns at HDFC Bank after reviewing board records and supervision data.
The clarification followed Chakraborty's resignation over “ethical differences,” which had earlier triggered stock pressure.
The reassurance restored confidence, driving the stock up over 5% as concerns around governance eased.
The Reserve Bank of India on Wednesday moved to put to rest concerns surrounding HDFC Bank's governance. It stated that its supervision and inspection of the country's largest private sector lender, including a detailed review of board meeting minutes, had revealed no material issues of concern.
RBI Governor Sanjay Malhotra, responding to a direct question on the bank, was unambiguous in his reassurance. "I would like to reiterate that at no point during our supervision or after examining their records did any governance or conduct-related material issue come to our notice. Under our regular supervision, board minutes are also reviewed. Copies of the minutes are provided to us," he said as quoted by news agency PTI.
1 April 2026
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The Governor also reiterated the RBI's earlier stance from March 19, affirming that the bank remains financially sound, backed by a professional board and competent management.
The statement comes in the wake of the abrupt resignation of part-time chairman Atanu Chakraborty on March 18, which sent shockwaves through the market. In his resignation letter, Chakraborty cited incongruence with the bank's ethics and values, but stopped short of pointing to any specific incidents or practices. The vague nature of his exit left fellow board members baffled, as he offered no particular instances during internal discussions either, according to reports. HDFC Bank, too, did not offer any substantive clarification on the reasons behind his departure.
The fallout was swift and severe. The resignation, disclosed to stock exchanges in the evening, wiped out nearly ₹1 lakh crore in market capitalisation in the next day's session.
The bank, however, was quick to act. It made timely disclosures, convened an early analyst meeting to address investor concerns. The RBI also stepped in, appointing veteran banker Keki Mistry as interim part-time Chairman to provide stability and restore confidence. HDFC Bank's board met on March 23 to approve the appointment of external law firms (both domestic and international) to formally review the circumstances surrounding the resignation.
Wednesday's statement from the Governor offered investors the clearest signal yet that the storm may have passed. HDFC Bank shares jumped over 5% intraday to around ₹812 on the back of the RBI's comments, a meaningful recovery, though the stock still remains down over 18% year-to-date, reflecting the lingering uncertainty that Chakraborty's unexplained exit had left behind.
