“Even if the concerns raised are just subjective statements and not material, we believe the bank might have missed the best time to address the concerns, which would have been alongside the resignation announcement; at least an investor call the same day would have helped,” said Pranav Gundlapalle, head of India Financials at Bernstein.
Chakraborty, part-time Chairman and independent director of the bank, tendered his resignation with immediate effect, citing “Certain happenings and practices within the bank, that I have observed over the last two years, are not in congruence with my personal values and ethics”. He had been on the board since May 2021 and was in his second term.
HDFC Bank clarified that while former chairman Chakraborty’s resignation letter was dated March 17, 2026, it was formally received by the bank on March 18, 2026, at 3:17 pm.
Brokerage house Bernstein said HDFC Bank remains deeply undervalued—trading at or below Covid-era valuations—but warned that rebuilding investor confidence could be a slow and challenging process.
The brokerage noted that even though the stock appears “super cheap,” recovery from the current concerns is unlikely to be immediate, with sentiment expected to remain fragile. It added that investors may stay on the sidelines until there is clarity on whether the issues trigger any regulatory scrutiny, which could further delay a turnaround.
Brokerage House Bernstein also said that the sudden resignation has raised questions over the governance standards at the lender.“The resignation added to the growing list of confirmed and unconfirmed information suggesting a decline in corporate governance standards at the bank, including a whistle-blower letter in early March citing concerns around internal controls and senior management changes,” said Gundlapalle. “Allegations linking the bank CEO to irregularities involving Lilavati Trust. A string of senior management exits during the last one year, including Vinay Razdan, CHRO, Rahul Shukla, head CRB and Bhavesh Zaveri, ED.”
In a call held early Thursday morning, the bank said it was not aware of the specific reasons behind Chakraborty’s resignation, adding that despite repeated queries, no detailed explanation was provided.
New chairman Keki Mistry indicated that the exit could stem from a relationship issue between the former chairman and the management—something analysts are interpreting as a possible power struggle. However, Mistry emphasised that there are no material concerns, specific instances, or operational issues. He added that regulators remain comfortable with the bank, noting regular onsite and offsite inspections, and highlighted that compliance, governance, and internal controls remain strong.
CEO Sashidhar Jagdishan also clarified that there are no differences with Deputy Managing Director Kaizad Bharucha, stating that both are aligned on the bank’s strategic objectives and reaffirming Bharucha’s commitment to the organisation.
The Nomination and Remuneration Committee (NRC) is expected to take a call on Jagdishan’s reappointment as CEO, with his current term set to end in October 2026.
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