HDFC Bank is waiting for the results of an additional review by its independent directors before recommending the reappointment of CEO Sashidhar Jagdishan to the Reserve Bank of India (RBI), according to sources. Jagdishan’s current term ends in October, and the bank’s board has not yet approved its recommendation. Under RBI rules, banks must apply for the reappointment of a CEO or submit new names at least six months before the CEO’s term ends.
Background of the Review
The bank has been under investor attention since former Chairman Atanu Chakraborty resigned in mid-March, saying that some practices at the bank did not match his personal ethics. An independent legal review completed last month found no evidence to support the governance concerns raised by him.
Review Linked to Media Reports
According to sources, the additional review is being carried out by independent directors of the board. The review is examining media reports published in May that claimed HDFC Bank had offered preferential interest rates on some large deposits, which is not allowed under RBI rules.
At that time, HDFC Bank said it has strong internal control, audit, and oversight systems to ensure compliance with regulations.
No Wrongdoing Found So Far
Sources said the review has not found any evidence of wrongdoing so far. The board committee will decide whether to recommend Jagdishan’s reappointment after the independent directors submit their report. The review is expected to be completed in early August.
RBI Had Earlier Cleared Governance Concerns
In March, the RBI stated that its regular assessments had found no major concerns regarding the conduct or governance of HDFC Bank. During the bank’s post-results conference call on Saturday, the management also said that the CEO succession process is still a “work in progress.”
