HDFC Bank Managing Director and Chief Executive Officer Sashidhar Jagdishan’s decision not to seek reappointment has put the spotlight on the succession process at India’s largest private-sector lender. The bank is now required to identify a candidate and secure regulatory approval before making an appointment.

In a regulatory filing on Saturday (August 29), the bank said it will now fast-track the process of appointing his successor.

Jagdishan will retire from HDFC Bank at the close of business on October 26, 2026, bringing his tenure as MD and CEO to an end. The process of finding his successor is expected to involve multiple stages within the bank before the final candidate is referred to the Reserve Bank of India.

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NRC and board begin selection process

According to a flash note by Macquarie Research, HDFC Bank’s Nomination and Remuneration Committee (NRC) is likely to be the first key body involved in the process. The committee would evaluate potential candidates, decide on its preferred choice and make a recommendation to the bank’s board.

HDFC Bank’s NRC is chaired by Harsh Kumar Bhanwala and also includes Rajiv Kumar, MD Ranganath and Sandeep Parekh as members, according to company data.

Once the NRC makes its recommendation, the candidate would have to be considered and approved by HDFC Bank’s board. The bank’s board is chaired by Rajiv Kumar. However, the process does not end with the board’s selection.

RBI approval is the final step

For the appointment of a managing director and chief executive at a private-sector bank, the proposed candidate must also receive the RBI’s approval. Macquarie said the board would recommend the selected candidate to the central bank, which would then take a final call on the person referred by HDFC Bank.

The brokerage noted that the RBI has generally communicated its approval within about 30-45 days of a bank recommending a candidate, although the actual timeline can vary.

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The succession process had already attracted market attention even before Jagdishan formally decided against another term. In its August 27 note, Macquarie said markets had been concerned about succession at HDFC Bank for some time, contributing to uncertainty around the stock.

At the time, the brokerage had outlined two possible scenarios: a short extension for Jagdishan while the bank searched for another candidate, or a full three-year term that would remove the immediate succession uncertainty. Jagdishan’s subsequent decision to retire has now taken the latter possibility off the table and made the selection of a new CEO the immediate priority.

All eyes on the search for next CEO candidate

With Jagdishan’s October 26 retirement date now fixed, attention will turn to how quickly the NRC and board can settle on a candidate and send the recommendation to the RBI for approval.