Anup Bagchi and Anup Saha face defining tests at HDFC Bank and Kotak Mahindra Bank

Weeks of uncertainty over leadership at two of India’s largest private sector lenders, HDFC Bank and Kotak Mahindra Bank, ended on October 1, when the Reserve Bank of India approved the appointments of their new managing directors and chief executive officers.

ICICI group veteran Anup Bagchi took charge at HDFC Bank on October 27, while Anup Saha, currently a whole-time director at Kotak Mahindra Bank (KMB), is set to take over from Ashok Vaswani on January 1, 2027, a day after Vaswani steps down.

The two appointments come at different junctures for the lenders. Bagchi takes charge as HDFC Bank works to address governance concerns that have weighed on the bank. Saha, meanwhile, inherits a bank grappling with slower deposit mobilisation relative to credit growth, pressure on margins, and the need to strengthen its liability franchise.

Bagchi to drive a strategic reset

Bagchi, who previously served as CEO of ICICI Prudential Life Insurance and held roles at ICICI Bank, takes over from Sashidhar Jagdishan, who stepped down on October 26 after deciding not to seek reappointment for a third term.

It is the first time an external candidate has taken the helm at HDFC Bank. That could allow the lender to reassess its strategy and operating priorities. “Bagchi’s appointment brings clarity to the bank’s much-awaited leadership transition. An external appointment could provide the bank a longer leadership runway and a cleaner slate to reassess its strategy, challenge existing practices and drive a strategic reset,” says Ankit Bihani, research analyst at Nomura Financial Advisory and Securities (India). Bagchi’s experience across retail and wholesale banking, capital markets, digital banking and insurance gives him a broad operating background to steer the lender through its next phase of growth, he adds.

Bagchi has signalled that his immediate priority will be to understand the bank’s challenges and consult key stakeholders before setting the agenda. “I’ll gather insights, and that will become a key input to our organisational priorities,” he said during the September-quarter earnings call. The post-merger transformation of the bank’s balance sheet, he suggested, was now in some sense unwinding.

The task ahead, however, is substantial. HDFC Bank continues to face challenges in deposit mobilisation, loan growth, and margin recovery. With the leadership uncertainty now resolved, investors will look for clarity on Bagchi’s medium-term strategy and evidence that it can translate into stronger operating performance. “Key monitorables will include deposit mobilisation, sustaining loan growth, margin recovery and improvement in return ratios. While the external appointment provides an opportunity for a strategic reset, the pace of execution and clarity on the medium-term growth strategy will be critical for investor confidence and a sustained re-rating,” Bihani says.

Dnyanada Vaidya, research analyst at Axis Direct, says Bagchi’s appointment should support the stock in the near term by removing the uncertainty surrounding leadership succession. The appointment also provides a full three-year term and beyond. The focus will now shift to accelerating growth, particularly in the retail portfolio, improving net interest margins (NIMs), strengthening the current account and savings account (CASA) franchise, and executing the bank’s strategy, Vaidya adds.

HDFC Bank’s provisional Q2FY27 update indicated an improvement in credit growth to around 5% QoQ, its strongest pace in nine quarters. The management has also indicated that it aims to increase retail loans to 60% of the overall portfolio over the medium term, from 52% in June 2026.

Saha: Building the liability franchise

Saha’s challenge at KMB is different. An insider who currently oversees consumer banking, marketing and data analytics, he has already spent about 10 months at the bank as a whole-time director. Before joining KMB, he played a key role in building Bajaj Finance’s retail lending and consumer finance businesses and advancing its digital transformation. He also worked at ICICI Bank, including in its credit card business.

For Saha, strengthening deposits and improving the funding mix will be central to sustaining growth. “Loan growth continues to outpace deposit mobilisation, which is leading to a decline in the CASA ratio and is creating pressure on the lender’s margins,” says Antu Eapen Thomas, senior research analyst at Geojit Investments. A sustained improvement in the deposit franchise and margin expansion will be important for KMB to regain its historical valuation premium and support a further re-rating, he adds.

Technology, meanwhile, is set to be another priority. At the September-quarter earnings call, Saha said he expected to devote nearly 30% of his time to technology solutions, arguing that “technology with human touch is where banking will differentiate itself”. He also highlighted the in-house technology capabilities. “Our bank is the only one of its type which almost operates like a model. Nearly half of the coding is being done within the bank,” he said. KMB plans to continue building its technology platforms and invest further in AI.

But Saha will also need to strengthen deposit mobilisation and build out lending businesses such as gold loans, credit cards, and personal loans. KMB’s CASA ratio fell to 38.2% in Q2FY27 from 42.3% a year earlier, underscoring the pressure on its low-cost deposit base. His experience at Bajaj Finance and ICICI Bank could prove useful in expanding these businesses. The challenge will be to translate that experience into stronger loan growth without widening the gap between credit expansion and deposit mobilisation.

Both CEOs get a three-year term. At HDFC Bank, Bagchi must restore confidence, establish a clear strategic direction, and improve growth and returns. At KMB, Saha must strengthen the liability franchise, ease margin pressures and build lending businesses while continuing to invest in technology. The leadership transitions may be over, but the real test begins now: whether they can turn their mandates into measurable improvements in performance.