The board of HDFC Bank is understood to have zeroed in on a retired regulator as the bank’s next non-executive chairman and is expected to shortly seek the Reserve Bank of India’s (RBI) approval for its preferred candidate.

According to sources, the board favours appointing a former RBI deputy governor, reflecting a view that the bank would benefit from a chairman with deep familiarity with banking regulation and supervisory practices. The move also comes as the bank seeks continuity in leadership. The board has reportedly requested the RBI to extend the tenure of interim chairman Keki Mistry by three months beyond June 18, when his current term ends. 

Mistry, who took over after then chairman Atanu Chakraborty’s abrupt resignation in March, is understood to have expressed reluctance to take up the role on a permanent basis, citing long-standing commitments and potential conflict-of-interest concerns arising from his association with the bank.

An extension would provide continuity while the board completes the process of appointing a permanent chairman and reviews key governance-related developments.

The preference for a former regulator, rather than a bureaucrat or corporate veteran, is being viewed against the backdrop of Chakraborty’s unexpected exit and the concerns he raised in his resignation letter. Chakraborty stepped down before completing his term, stating that “certain happenings and practices within the bank that I have observed over the last two years are not in congruence with my personal values and ethics”.

Market observers said the appointment of a respected former regulator could help restore confidence in the bank’s governance framework following the controversy triggered by Chakraborty’s remarks. HDFC Bank shares have declined more than 20% since January.

Meanwhile, the independent legal review commissioned by the bank is expected to be submitted within the next few days, according to people familiar with the matter. The report is considered important for resolving uncertainty surrounding the reappointment of Managing Director and Chief Executive Officer Sashidhar Jagdishan, whose second term ends in October.

The findings, being prepared by Trilegal, Wadia Ghandy & Co and an international law firm, are expected after nearly three months of review into the issues flagged by Chakraborty. The report has taken longer than the bank had initially anticipated, sources said.

Its submission assumes added significance as the board prepares to seek regulatory approval for Jagdishan’s reappointment. While there is no formal requirement, banks typically begin the process around six months before the incumbent’s term expires.