Atanu Chakraborty, former part-time chairman of HDFC Bank, on Monday pushed back against suggestions that his resignation letter contained insinuations, saying those interpreting it that way “need to read the dictionary.”
His remarks come after Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey cautioned that directors should avoid unsubstantiated insinuations and raise concerns formally within boardrooms. Chakraborty, however, maintained he had made no allegations, only highlighted a divergence in values and ethical frameworks.
In an interview with CNBC-TV18, Chakraborty reiterated that his decision to step down on March 18 stemmed from an “incongruence” between his own standards of governance and those he perceived at the bank. “We do not dig wells after the fire has taken place. There needs to be avoidance of risky practices,” he said, underscoring the need for preventive, not reactive, governance.
Mis-selling of additional tier-1 (AT1) bonds
He pointed to the mis-selling of additional tier-1 (AT1) bonds to clients in Dubai—an issue that drew regulatory scrutiny—as emblematic of his concerns. While the bank had characterised the episode as a “technical lapse”, Chakraborty suggested it raised deeper questions around conduct and ethics. He also flagged delays in disciplinary action, noting that the issues persisted for years before corrective steps were taken.
“Something goes on for eight years and suddenly we take an action… I feel these conduct issues should not arise in the first place.”. He described this as reactive, not preventive governance. Last week, the lender terminated three senior executives over their alleged role in the mis-selling linked to Credit Suisse.
At the same time, Chakraborty avoided drawing broader conclusions on governance at the lender, saying it would be “unfair” to do so.
Dismissing reports of a power struggle with managing director and CEO Sashidhar Jagdishan, he said “personality differences have been overblown” and clarified that the question of the CEO’s reappointment had not come up before the board. “Something which was not even discussed—how could differences be there?” he said.
Chakraborty also rejected the view that his resignation triggered the sharp fall in HDFC Bank’s stock, attributing the decline largely to broader market factors, including geopolitical tensions. He added that the stock had been underperforming even earlier, pointing to concerns such as slower CASA growth and a relatively high cost-to-income ratio.
Emphasising the role of independent directors, he said their responsibility extends beyond oversight to ensuring that governance standards, customer protection and long-term institutional integrity are upheld.