The HDFC Bank board on Thursday did not discuss the independent legal review commissioned following former Chairman Atanu Chakraborty’s abrupt resignation, as the report is yet to be submitted by the law firms conducting the exercise.
The delay extends uncertainty around a review that is being closely watched ahead of the reappointment of Sashidhar Jagdishan, managing director and chief executive officer, whose current term ends in October. Sources said the report, commissioned nearly three months ago, has taken longer than the bank had anticipated. HDFC Bank did not comment on the reasons for the delay.
Separately, the Reserve Bank of India approved a three-month extension for Keki Mistry as part-time chairman until September 18, or until a regular chairman is appointed, whichever is earlier.
The delay in submitting the legal review report prolongs uncertainty surrounding an issue that has lingered since Chakraborty’s sudden resignation earlier this year. The former chairman stepped down before completing his term, citing “certain happenings and practices” within the bank that were “not in congruence with my personal values and ethics”. He did not elaborate further.
The review, commissioned nearly three months ago, is being undertaken by Trilegal, Wadia Ghandy & Co and an international law firm. Sources said the exercise has taken longer than the bank had anticipated.
The timing is significant because the bank is expected to seek regulatory approval for Jagdishan’s reappointment. His current term ends in October. While there is no formal requirement, banks typically approach the Reserve Bank of India (RBI) several months before the expiry of a chief executive’s term to ensure a smooth approval process.
People familiar with the matter said there is little expectation that the review will uncover anything materially adverse against the bank. Nevertheless, the report is viewed as important because it is expected to provide clarity on the circumstances that led to Chakraborty’s departure and help draw a line under months of speculation.
Mistry was appointed part-time chairman on March 19 following Chakraborty’s resignation. Sources had earlier told Financial Express that the board was close to finalising a candidate for the role of non-executive chairman, although the process could still take some time. A retired regulator or a senior banking veteran is understood to be among the leading contenders.
The extension ensures continuity at the board level while the succession process is completed and the legal review is finalised.
HDFC Bank has come under increased scrutiny over governance-related matters in recent weeks. On May 27, The Indian Express reported that the bank had internally examined payments worth around ₹45 crore made to the Maharashtra State Road Development Corporation that were allegedly routed as marketing expenses to effectively offer higher returns on deposits. HDFC Bank denied the allegations, saying it has robust internal oversight, audit and control mechanisms in place. People familiar with the matter described the episode as a case of “much ado about nothing”.
The bank also announced that its annual general meeting will be held on August 5.
Shares of HDFC Bank closed 1.5 per cent higher at ₹798.55 on the BSE. The disclosures were made after market hours.