The Reserve Bank of India on Thursday said HDFC Bank remains financially sound, well-capitalised, and adequately liquid, with no material concerns regarding governance or conduct based on its assessment.
The banking regulator stated that it has taken note of recent developments at HDFC Bank and approved the bank’s request for a transition arrangement for the position of part-time chairman. It added that it will continue to engage with the bank’s board and management on the way forward.
The statement comes amid market turbulence following the sudden resignation of part-time chairman Atanu Chakraborty.
Shares of HDFC Bank witnessed sharp volatility during the day, plunging nearly 9% in early trade to around Rs 770 from the previous close of Rs 843.05. However, the stock pared its losses after a post-opening analyst call, where interim chairman Keki Mistry reassured investors that there were no material governance or operational concerns behind the exit.
The recovery helped the stock climb off its lows, though it was still trading about 5% lower at around Rs 803 apiece on the NSE at the time of writing.
During the analyst call, Mistry said the board and management are “completely cohesive and united,” and emphasised that there has “never been any kind of discussion on any matter that is contentious in terms of governance” at the board level.
He highlighted that strong oversight mechanisms are in place through independent board committees, including audit, risk policy, and nomination and remuneration committees, which oversee all aspects of operations such as risk management, compliance, and audit.
“What caused that letter to be sent today is something which, really, to my mind, defies logic,” Mistry said, adding that any minor issues are addressed promptly with clear timelines.
He further underscored that the bank has a “very strong risk management process and a very strong audit process,” noting that, as a systemically important institution, HDFC Bank is under continuous regulatory supervision.
Despite the reassurances from both the regulator and the bank’s leadership, the lack of detailed disclosures around the circumstances leading to Chakraborty’s resignation has continued to weigh on investor sentiment.