HDFC Bank ex-chair breaks silence on sudden resignation
HDFC Bank ex-chair breaks silence on sudden resignation
Atanu Chakraborty, the former part-time chairman of HDFC Bank, has clarified his reason for resigning on March 18.
He said it wasn't a single incident but a growing sense of "incongruence" over two years.
In an interview with CNBC-TV18, Chakraborty said this incongruence was between his value framework and that of the bank's approach.
He didn't reveal confidential boardroom discussions but pointed to issues in Dubai operations as an example known to wider public.
Tenure witnessed HDFC merger, HDB IPO
Chakraborty, a former bureaucrat, joined HDFC Bank's board nearly five years ago as a non-executive independent chairman.
His tenure witnessed major events like the bank's merger with HDFC Ltd., monetization of Credila, and IPO of HDB Financial Services.
He said these strategic moves strengthened the bank's balance sheet and brought it in line with regulatory expectations.
Chakraborty cites values and governance discrepancy
Chakraborty said his resignation letter is self-explanatory, highlighting a discrepancy between his value framework and that of the bank.
He said when such a dilemma arises, it becomes a personal decision.
This discrepancy wasn't just about facts but frameworks—his understanding of values, ethics, and governance versus how they were interpreted or prioritized within the bank.
Directors must protect depositors and shareholders
Chakraborty stressed that for an independent director, the mandate goes beyond performance metrics to safeguarding probity, ensuring transparency, and aligning business conduct with long-term interests of depositors and shareholders.
He argued when customer impact is widespread and regulatory attention sustained, it transcends technicalities.
This distinction between reactive correction and proactive ethical alignment appears central to his unease with HDFC Bank's operations.
Chakraborty exit sparked selloff
Chakraborty's resignation led to a stock selloff and damage control by the bank.
He didn't elaborate on the differences he referred to, but nine people told Reuters that the bank had been struggling with internal rifts in recent years, including between Chakraborty and CEO Sashidhar Jagdishan.
The two reportedly clashed over strategy and HR policy.
Stock fell 12% after Chakraborty exit
The HDFC Bank management and India's banking regulator denied any governance or financial problems at the lender.
However, its stock fell 12% over three days after Chakraborty's exit.
It recovered briefly after the bank said last week it had appointed external law firms to review the claims but has since weakened again.
Investors will eventually look at longer-term performance but if quarterly results and stock prices underperform markets, shareholders will question management performance and seek change of leadership.