Former HDFC Bank chairman Atanu Chakraborty has defended his decision to step down earlier this month, making it clear he has no regrets about the move and does not see it as the reason behind the sharp fall in the bank’s stock.
In an interview with CNBC-TV18 on March 30, first since stepping down, he indicated that the move was not triggered by a single event but stemmed from a broader sense of discomfort that had built up over time.
In the interview with CNBC-TV18, Chakraborty said, “I completely refute that there was value erosion on account of my resignation. I have only referred to what is in public domain; if someone is using the word insinuation for my letter, they need to read the dictionary.”
A decision rooted in ‘values and ethics’
Chakraborty’s resignation letter had cited concerns around “values” and “ethics”, sparking questions about governance at the country’s largest private sector lender. In his latest remarks, he suggested the decision was not triggered by a single incident but stemmed from a broader unease that developed over time.
He emphasised that independent directors have a responsibility not just to oversee performance, but also to ensure that standards of integrity, transparency and accountability are upheld. “I resigned due to a lack of alignment in the domain of ethics and values… addressing underperformance is part of the duty of independent directors,” he said.
When asked if he had any regrets about stepping down, Chakraborty was unequivocal. “No, do you have any reason to ask that?” he said, adding that the issues being discussed publicly were secondary to what he described as a more personal dilemma. He explained that while others may assess whether his concerns had implications for the bank, for him the question was simpler: whether he could continue in a situation he was uncomfortable with. If not, “I should move on,” he said in the interview.
Pushback against ‘insinuation’ narrative
The comments come amid scrutiny from regulators. Sebi chairman Tuhin Kanta Pandey recently said independent directors should avoid making insinuations without backing them with evidence. “No one is expected to make insinuations without proper evidence and recordings,” Pandey had said.
Chakraborty, however, rejected the suggestion that his letter contained any such insinuations, maintaining that he had only referred to matters already in the public domain.
‘No link’ to stock decline
HDFC Bank’s shares had dropped nearly 12% in the days following his resignation, erasing about Rs 1.52 lakh crore in market value. Chakraborty dismissed the idea that his exit was responsible for the decline, reiterating that there was no direct link between the two.
He also addressed reports of a disagreement with CEO Sashidhar Jagdishan, which had been cited in some reports as a possible reason for his exit.
Chakraborty said the issue of the CEO’s reappointment had not even come up for discussion at the board level, pushing back against the idea of any internal conflict.
“Matter of Sashidhar Jagdishan’s re-appointment had not even come to the board… how could differences be there about something that had not even been discussed,” he said. He added that the narrative around a “personality issue” had been overstated.
Performance and governance concerns
While he did not go into specifics, Chakraborty pointed to concerns around performance and risk practices, indicating that these formed part of the broader context behind his decision. “We do not dig wells after the fire has taken place. There needs to be avoidance of risky practices. There has been underperformance like low CASA and low income ratio,” he said in the CNBC TV-18 interview.
He also noted that the benefits of the merger with parent HDFC were yet to fully materialise.
Bank orders external review
Following his resignation, HDFC Bank said it has engaged external law firms, both domestic and international, to review the contents of Chakraborty’s letter as part of its governance process. The bank has maintained that the letter did not point to any specific incident or practice that conflicted with his stated concerns.
Chakraborty described the move as procedural. “Appointing law firms is more of a compliance requirement; my letter mentions a larger governance issue,” he said.