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Sashidhar Jagdishan will step down as the Managing Director and CEO of HDFC Bank after deciding not to seek another term. The bank said its board had sought to persuade him to continue, but he decided against seeking reappointment.
The deets: Jagdishan took over as HDFC Bank’s MD and CEO on October 27, 2020, succeeding Aditya Puri. His tenure included the completion of the merger between HDFC Bank and Housing Development Finance Corporation (HDFC), one of the largest corporate mergers in India.
What now: the process to appoint the next Managing Director and Chief Executive Officer of HDFC Bank will be completed ‘well within time’, top sources told CNBC-TV18.
Sources said the new CEO will take over a strong bank but will have to address ‘certain alignment issues’.
What’s at stake: this surprise resignation will test whether India’s largest private-sector lender can restore investor confidence and move past recent governance concerns.
It also comes as the lender confronts a slew of issues that have placed its governance practices under intense scrutiny. The first major shock came in March, when HDFC Bank Chairman Atanu Chakraborty resigned.
Last year, the bank was barred from onboarding new customers at its Dubai branch after a local regulator flagged process lapses.
While HDFC Bank is India’s most valuable lender, with a market capitalisation of about $116 billion, its shares have underperformed the broader banking index and some of its biggest peers.
The stock has fallen 26% this year, compared with a 3.5% decline in the Nifty Bank Index, marking its worst relative underperformance since 2003.
Just a couple of days ago, the lender was also in the spotlight following reports of a US lawsuit against the bank and two senior executives, accusing them of misleading investors and failing to disclose governance issues.
The lawsuit was filed on behalf of investors who bought HDFC Bank securities between July 2023 and May 2026.
What’s the issue: the complaint alleges that HDFC Bank recorded certain payments to the Maharashtra State Road Development Corporation as marketing expenses when they were actually meant to compensate the agency for receiving lower interest on its deposits.
What the market will watch: for now, who takes charge, how smoothly the transition unfolds, and whether the new leadership can maintain the bank’s growth trajectory and governance standards.
