HDFC Bank Part-time Chair Resigns Citing Ethics; Interim Named

Atanu Chakraborty, Part-time Chairman and Independent Director of HDFC Bank, resigned effective March 18, 2026. He stated that "certain happenings and practices within the bank were not in alignment with my personal values and ethics" as his reason for leaving.

Following his resignation, the Reserve Bank of India (RBI) has approved the appointment of Keki Mistry as interim Part-time Chairman. Mr. Mistry's interim term begins March 19, 2026, and will last for three months.

Why This Matters

A resignation from the Part-time Chairman of India's largest private bank, especially citing ethical discrepancies, raises questions about the bank's internal governance and operational practices.

This development comes as the banking sector faces increased regulatory scrutiny regarding board oversight and ethical conduct, making a former chairman's statement particularly significant.

Background

Atanu Chakraborty, a former IAS officer and ex-Secretary in the Department of Economic Affairs, joined the HDFC Bank board in May 2021. He was reappointed for a second term from May 5, 2024, to May 4, 2027. His current resignation comes well before the end of this term.

Keki Mistry, the new interim chairman, is a seasoned professional and a Chartered Accountant. He previously served as the Vice Chairman & CEO of HDFC Ltd. before its merger with HDFC Bank. He remains a Non-Executive Director on the HDFC Bank board.

HDFC Bank has recently faced regulatory attention. The RBI imposed a ₹91 lakh penalty in November 2025 for compliance lapses, and SEBI issued warning letters in December 2024 regarding investment banking issues and delayed disclosures. The bank also experienced IT system issues that led to temporary credit card bans by the RBI.

What Changes Now

• The bank's top leadership structure changes with Mr. Chakraborty's departure.
• Keki Mistry will temporarily lead as Part-time Chairman, ensuring continuity.
• There will be increased focus on the bank's internal practices and governance standards.
• The bank must navigate the interim period and subsequently appoint a permanent Part-time Chairman.

Risks to Watch

• The specific "happenings and practices" cited by Mr. Chakraborty could indicate underlying governance or ethical issues needing resolution.
• Investor confidence might be tested if the reasons for resignation are not adequately addressed or explained.
• The search for a permanent Part-time Chairman could be influenced by the circumstances of Mr. Chakraborty's departure.

Peer Comparison

While HDFC Bank is unique in its scale, the broader Indian banking sector, including peers like ICICI Bank and Axis Bank, is under increasing RBI scrutiny for governance and compliance. The regulatory environment emphasizes robust board oversight and ethical practices across the industry.

What to Track Next

• Any further clarifications from HDFC Bank regarding the reasons for Mr. Chakraborty's resignation.
• The bank's process and timeline for appointing a permanent Part-time Chairman.
• Market and investor reaction to the leadership change and governance concerns.
• Future RBI or SEBI actions related to banking governance standards.