HDFC Bank CEO and Managing Director Sashidhar Jagdishan will step down when his current term ends on October 26, the bank said on Saturday.
Jagdishan was widely expected to seek a third term at the helm of India’s largest private-sector bank. However, the bank’s board said it would accelerate the process of identifying 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 regulatory filing.
EXIT COMES AMID GOVERNANCE QUESTIONS
Jagdishan’s decision comes months after Atanu Chakraborty resigned as HDFC Bank’s part-time chairman in March, citing ethical differences.
In his resignation letter, Chakraborty said that “certain happenings and practices within the bank” over the previous two years did not align with his personal values and ethical standards.
His exit triggered concerns in financial markets about the bank’s internal processes and governance.
HDFC Bank later commissioned an independent legal review to examine the issues raised by Chakraborty. The review found no evidence or documentation supporting the ethical and governance concerns he had highlighted.
The bank appointed former bureaucrat Rajiv Kumar as chairman in July.
JAGDISHAN AMONG THREE EXECUTIVES PENALISED
Jagdishan was also among three senior HDFC Bank executives who were fined in July following an internal review into the lender’s dealings 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 found no conclusive evidence of bad faith, personal gain or improper intent. However, it concluded that the conduct involved constituted “business overreach”.
Reports in May had alleged that HDFC Bank paid Rs 45 crore to MSRDC to secure large deposits. The payments were reportedly recorded as marketing expenses, and Jagdishan was said to have been aware of the arrangement.
HDFC Bank rejected the allegations of wrongdoing, maintaining that it had strong internal oversight, audit and control mechanisms and that the matter had been dealt with according to established procedures.
PROFIT UP 5% IN Q1FY27
HDFC Bank reported a 5 per cent rise in standalone net profit for the April-June quarter last month, supported by growth in consumer lending and a sharp reduction in provisions for potential bad loans.
The bank posted a standalone net profit of Rs 19,060 crore, compared with Rs 18,150 crore in the corresponding quarter a year earlier. Analysts had estimated profit at around Rs 19,190 crore.
Total loans increased 15.4 per cent year-on-year, with housing loans, personal loans and other retail lending providing most of the growth. Deposits rose 13.3 per cent during the period.
Net interest income, which represents the difference between interest earned on loans and interest paid to depositors, increased 6.7 per cent to Rs 33,530 crore.
However, HDFC Bank’s net interest margin stayed at 3.26 per cent, significantly below the 4 per cent level seen before its 2023 merger with parent company HDFC. The metric reflects the bank’s earnings from its core lending operations after factoring in the interest paid on deposits.
Gross non-performing assets rose marginally to 1.17 per cent of total loans from 1.15 per cent in the previous quarter, indicating a slight increase in loans where borrowers had stopped making repayments.
Provisions and contingencies, meanwhile, dropped 78 per cent year-on-year to Rs 3,060 crore. These provisions are funds kept aside to cover potential losses from bad loans and other financial risks.
Income from fees, government securities and other market-related activities declined 41 per cent from the previous quarter to Rs 12,821 crore. Higher bond yields and Reserve Bank of India restrictions on certain foreign-exchange transactions weighed on this segment of the bank’s income.
