In a surprise regulatory clearance that came within just 20 days, the Reserve Bank of India has approved the appointment of ICICI Bank veteran Anup Bagchi as the new chief executive of HDFC Bank for a three-year term beginning later this month. Bagchi will succeed incumbent Sashidhar Jagdishan, who said in late August that he was not willing to seek reappointment after his term ends on October 27.
Normally, the central bank takes three to six months to clear the appointment of a bank CEO. HDFC Bank, however, had sent its proposed names to the regulator only on September 12, nearly two weeks after Jagdishan announced his decision not to seek another term.
In comparison, the RBI’s approval of Anup Saha as Kotak Mahindra Bank’s new CEO came more than six months after the bank submitted its proposed names to the regulator.
In a regulatory filing on Thursday, the country’s largest private sector bank and the second-largest lender after SBI said the RBI had accepted its proposal dated September 12 recommending two names for approval. Though the bank did not name the candidates, the names were widely believed to be those of deputy managing director Kaizad Bharuacha and Bagchi.
For Bharuacha, the decision marks the end of his aspirations to become the bank’s CEO. He is already 61 and has been on the board for 13 years. The RBI caps a continuous board position at 15 years. This is also the second time Bharuacha has missed out on the top job. He was considered a frontrunner to succeed founding CEO Aditya Puri, who retired in October 2020 after leading the bank from its inception.
Bagchi is currently managing director and chief executive of ICICI Prudential Life Insurance, promoted by ICICI Bank. He has been at the helm of the insurer since 2023. His appointment is subject to shareholder approval and finalisation by the bank’s board, which said on Thursday that it would create a fourth whole-time director position in connection with his appointment.
Bagchi’s appointment comes at a time when HDFC Bank has been dealing with a series of governance and regulatory issues, including the resignation of former part-time chairman Atanu Chakraborty and the RBI’s action over the bank paying a higher-than-approved interest rate to attract deposits from a state government entity. The bank’s former CEO and CFO were each penalised Rs 1 lakh in the matter.
The bank is also facing legal proceedings over allegations relating to the mis-selling of substandard debt of failed Swiss lender Credit Suisse to foreign investors, primarily in the Middle East.
These developments have weighed on HDFC Bank’s shares, which are trading near multi-year lows. The bank has the largest weight in both the Nifty and Sensex.
Rajiv Kumar was appointed HDFC Bank’s part-time chairman in late June. With Bagchi’s appointment, the bank is set to enter a new phase under a leadership team that has undergone several changes in recent months.
Bagchi has been associated with the ICICI Group since 1992 and has held leadership positions across treasury, retail banking, wholesale banking, investment banking and digital financial services. He previously served as CEO of ICICI Securities and as executive director of ICICI Bank from 2017 to 2023, overseeing retail, business and rural banking before subsequently taking charge of wholesale banking.
