HDFC BANK

 

The sudden exit of Atanu Chakraborty as non-executive chairman and independent director of HDFC Bank left the common man perplexed. The reason adduced was not the polite euphimism, 'personal reasons or other commitments', but "certain happenings and practices within the bank over the past two years that are not in congruence with my personal values and ethics."

I feel this was unkind. If his concerns had warranted resignation they did warrant clarity. Ambiguity at the highest level erodes trust. By neither fully disclosing the issue nor remaining silent, the resignation risks the worst of both the worlds, reputational damage without accountability.

HDFC Bank is not merely India's largest private sector bank. It has been the gold standard of governance, prudence and execution. It commands a valuation built not just on performance, but on credibility.

HDFC Bank is among the three major banks identified by Reserve Bank of India (RBI) as Domestic Systemically Important Banks (D-SIBs), often called "too big to fail" institutions --State Bank of India (SBI), HDFC Bank, and ICICI Bank. These institutions are considered vital to the Indian economy due to their size, cross-jurisdictional activities, and interconnectedness. 

Perception is a reality in institutions of systemic importance.

When the non executive chairman of the institution flags ethical concerns, it touches confidence in India's financial architecture. 

The role of the independent director is not merely to dissent, but to ensure that dissent is recorded, debated and when necessary escalated. Resignation should be the last resort, not the first visible action.

Boardrooms are meant to be more contested, more accountable and ultimately more transparent. Governance is not just about compliance. It is about culture. If a chairman resigns on ethical grounds, it has to be explained or substantiated.

Perhaps if the chairman had been from the banking sector itself, the situation would have been better managed

A formal review is essential to restore the credibility of the bank that has taken an unfortunate hit over the imbroglio.
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Based in part from an article in Sunday Times of India of 22nd March 2026 by Lloyd Mathias.