HDFC Bank CEO Sashidhar Jagdishan not seeking reappointment, to step down when term ends in October 2026

HDFC Bank chief executive Sashidhar Jagdishan has decided not to seek another term and will step down when his current tenure ends on October 26, the bank said on Saturday.

Jagdishan had been expected to seek a third term as the head of India’s largest private-sector bank. The bank’s board said it would fast-track the process of selecting his successor.

“Mr Jagdishan reiterated his decision to not seek reappointment. Accordingly, he shall retire from the services of the bank upon the close of business hours on October 26, 2026,” HDFC Bank said in a filing with the stock exchanges.

EXIT AMID GOVERNANCE CONCERNS

The announcement comes after Atanu Chakraborty resigned as the bank’s part-time chairman in March, citing ethical differences.

In his resignation letter, Chakraborty had raised concerns about the bank’s internal functioning, stating that “certain happenings and practices within the bank” during the preceding two years were “not in congruence with my personal values and ethics.”

His departure drew attention on Dalal Street and raised questions about internal practices at India’s largest private-sector lender.

HDFC Bank subsequently commissioned an independent legal review. The review found no evidence or records to support the ethical and governance concerns raised by Chakraborty.

The bank appointed former bureaucrat Rajiv Kumar as its chairman in July.

JAGDISHAN AMONG THREE EXECUTIVES FINED

Jagdishan was among three senior executives fined by the bank in July following an internal review of its arrangement with the Maharashtra State Road Development Corporation (MSRDC).

The bank imposed a penalty of Rs 1 lakh each on Jagdishan, Chief Financial Officer Srinivasan Vaidyanathan and Group Head for Retail Assets Arvind Vohra.

The internal committee did not find conclusive evidence of bad faith, personal enrichment or any improper motive. However, it concluded that the conduct of the employees involved amounted to “business overreach”.

Media reports in May had alleged that HDFC Bank paid Rs 45 crore to MSRDC to attract large deposits. The payments were reportedly classified as marketing expenses, and Jagdishan was allegedly aware of them.

HDFC Bank denied any wrongdoing. It said the bank had robust internal oversight, audit and control systems and that all issues were handled in accordance with established rules.

PROFIT RISES 5% IN Q1FY27

HDFC Bank last month reported a 5 per cent increase in profit for the April-June quarter, helped by stronger consumer lending and a decline in the amount set aside to cover possible bad loans.

The bank recorded a standalone net profit of Rs 19,060 crore, compared with Rs 18,150 crore in the same quarter last year. Analysts had expected a profit of around Rs 19,190 crore.

Its total loans grew by 15.4 per cent from a year earlier, driven mainly by housing loans, personal loans and other retail lending. Deposits increased by 13.3 per cent.

Net interest income, the difference between the interest earned from loans and the interest paid to depositors, rose by 6.7 per cent to Rs 33,530 crore.

However, the bank’s net interest margin remained at 3.26 per cent, below the 4 per cent level recorded before HDFC Bank merged with its parent company, HDFC, in 2023. This margin shows how much the bank earns from its core lending business after accounting for the interest it pays.

Gross non-performing assets as a share of total loans edged up to 1.17 per cent from 1.15 per cent in the previous quarter. This means there was a marginal increase in the proportion of loans on which borrowers had stopped making repayments.

Meanwhile, provisions and contingencies fell 78 per cent from a year earlier to Rs 3,060 crore. This is the money the bank sets aside to cover possible losses from bad loans and other risks.

Income from fees, government bonds and other market operations fell 41 per cent from the previous quarter to Rs 12,821 crore. Rising bond yields and Reserve Bank of India restrictions on certain foreign-exchange transactions affected this part of the bank’s earnings.

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(With inputs from Reuters)