The sudden resignation and exit of Atanu Chakraborty as part-time Chairman & Independent Director of HDFC Bank, India’s largest private sector lender, caused massive value erosion of the bank’s stocks which on Thursday (March 19, 2026) fell to 52-weeks low before closing with a loss of 5.13% at Rs 799.70 on the BSE.
The bank’s investors lost an estimated ₹1.03 lakh crore in market capitalisation in one day despite the bank’s board and the Reserve Bank of India (RBI) reassuring investors and the markets about the sound financial health and high corporate governance at the bank.
In his resignation letter dated March 17 which was made public on March 18 late night, Mr Chakraborty, the 1985 batch Gujarat cadre IAS officer who was previously Secretary, Department of Economic Affairs stated, “Certain happenings and practices within the bank, that I have observed over last two years are not in congruence with my personal Values and Ethics. This is the basis of my aforementioned [resignation] decision.”
“I confirm that there are no other material reasons for my resignation other than those stated above,” his letter stated.
On Wednesday (March 18, 2026) evening the RBI had appointed Keki Mistry, the HDFC veteran as Interim part-time Chairman of the bank for three months.
Addressing a virtual press conference on Thursday (March 19, 2026) Mr. Mistry said “We really do not understand that led to this kind of reaction [resignation]. I assure all shareholders that there is no material matter at this point of time [that led to the resignation]. Members of the Board asked Mr Chakraborty about the reason behind his resignation but he said he had no particular concern.”
“No specific issue was brought to our attention and no specific operational and other issues had been highlighted,” Mr. Mistry said adding ‘the board remains fairly committed to safeguard the institutional value and investors’ confidence.”
He said the bank’s board operates with strong governance standards, robust internal controls and has a very experienced management team. He said, he at the age 71 would not have taken up this responsibility if the bank’s governance standards were not line with his values.
Answering a question on the reputational loss that bank might have suffered after the abrupt resignation, Mr Mistry said, “We will be able to arrest it. The management team and the board are united. Whatever fears are there in the minds of investors will be addressed. Also the RBI has expressed satisfaction with the bank.”
Answering another question on any friction with the management, Mr. Mistry said, “Its more of a personal relationship issue. Lets not get into that.”
The Hindu reached out to Mr Chakraborty, whi took over the position in 2021 prior to the merger of HFDC Ltd with HDFC Bank to find out the reason behind the drastic step and verify the board’s version, but his response remains awaited.
Reportedly he told a TV channel that he stepped down due to ideological differences and not for any organizational malpractices.
High drama followed Mr. Chakraborty’s resignation as the whole board tried to find an answer to the resignation to which he remained mum. This ‘baffled’ some of the board members.
He was also persuaded to take back the resignation, elaborate his concerns and change some of the words and language which he did not oblige.
In the meantime as the board meeting was progressing, four directors rushed to the RBI at 7 pm to brief about the development and take the regulator into confidence. This led to swift approval of the interim Chairman.
On Thursday (March 19, 2026) when the banks stocks were hammed at the stock exchanges and concerns were raised on the bank’s functioning, the RBI issued a statement reposing its faith in the bank.
“HDFC Bank is a Domestic Systemically Important Bank (D-SIB) with sound financials, professionally run board and competent management team. Basis our periodical assessment, there are no material concerns on record as regards its conduct or governance. The bank remains well-capitalised and the financial position of the bank remains satisfactory with sufficient liquidity,” the RBI said.
The regulator said it would continue to engage with the Board and management on the way forward.
Dispelling concerns from various quarters, Sashidhar Jagdishan, CEO & MD, HDFC Bank said, “The intensity at which the bank is being supervised, the board and the management believes that there should not be any surprises. We are reasonably confident about the rigor, the ethos and confident that the controls are working.”
“Anybody can say anything but as of now we are reasonably sanguine about where we stand and what we have been saying all along.”
Published – March 19, 2026 09:58 am IST
Source: https://www.thehindu.com/business/markets/hdfc-bank-stock-falls-chairman-resigns/article70760568.ece
