The chief executive officer and managing director of HDFC Bank, Sashidhar Jagdishan, on Thursday said former chairman Atanu Chakraborty was asked to reconsider his decision to resign, elaborate on concerns involving ethics, and “take back some of the language” used in his resignation letter.
Jagdishan was addressing the media in Mumbai after Chakraborty hinted at governance issues in his resignation. He said a majority of board members were baffled by the move, as Chakraborty did not specify the concerns he alluded to in his letter.
Reiterating that there are no issues at the bank, Jagdishan said HDFC Bank would be able to recoup any reputational impact in due course.
Chakraborty, who had served on the board for five years, resigned on Wednesday citing concerns related to ethics. Jagdishan said every board member attempted to persuade him to either withdraw his resignation or elaborate on the concerns so that they could be addressed, but he did not relent.
According to Jagdishan, the resignation—dated March 17—was discussed at a meeting of the nomination and remuneration committee (NRC) on Wednesday. Around 7 pm, four board members, including two whole-time and two independent directors, initiated a dialogue with the Reserve Bank of India regarding the developments.
Responding to a query on whether an investigation into the bank’s Dubai operations—where it has been barred from onboarding new clients at its IFSC branch—had a bearing on the resignation, Jagdishan said such issues arise from time to time but asserted that this was not the reason behind Chakraborty’s exit.
After the board failed to convince Chakraborty to either stay on or modify the language of his resignation letter, the bank informed the RBI of the matter. The regulator subsequently approved the appointment of Keki Mistry as interim chairman for a period of three months.
Mistry had earlier alluded to a possible personal issue behind Chakraborty’s abrupt exit but declined to elaborate.
Speaking on an analyst call, independent director M D Ranganath said board members “repeatedly” asked Chakraborty to cite specific instances, but none were provided. Renu Sud Karnad also said the board was left baffled as Chakraborty was not forthcoming about the claims made in his resignation letter.
On the Dubai matter, Ranganath said the investigation, accountability assessment and disciplinary action have been completed, and the issue now stands closed.
The NRC is scheduled to meet in about a month to discuss Jagdishan’s reappointment, with his current term set to end in seven months.