HDFC Bank chairman Atanu Chakraborty resigns, flags ethical concerns; Keki Mistry named interim chief

India’s largest private sector lender HDFC Bank’s part-time chairman Atanu Chakraborty has resigned with immediate effect, citing ethical concerns over certain practices within the bank, according to an exchange filing.

In his resignation letter dated March 17, Chakraborty said that “certain happenings and practices within the bank… are not in congruence with my personal values and ethics,” without elaborating further.

The bank, in its regulatory disclosure on March 18, confirmed that there were “no reasons other than those mentioned in the resignation letter” for his exit.

Sudden exit

Chakraborty’s resignation comes into effect immediately, cutting short his tenure that was scheduled to run until May 2027.

The board has appointed Keki Mistry as interim part-time chairman for a period of three months, with approval from the Reserve Bank of India (RBI), effective March 19.

Ethical red flag, but no specifics

While the resignation letter avoids detailing specific issues, Chakraborty’s reference to “happenings and practices” over the past two years points to concerns that may have developed during a critical phase for the bank.

This period coincides with the integration of Housing Development Finance Corporation (HDFC) with HDFC Bank—one of India’s largest financial sector mergers—completed in 2023.

"I joined the Board of HDFC Bank in May 2021. My tenure on the Board saw momentous events like merger of the bank with HDFC Ltd that created a conglomerate under the Bank. This strategic initiative made HDFC Bank the second largest Bank in the country. Though, the benefits of merger are yet to fully fructify," the resignation letter read. "Certain happenings and practices within the bank, that I have observed over last two years, are not in congruence with my personal values and ethics. This is the basis of my aforementioned decision."

Chakraborty, a former economic affairs secretary, had joined the board in May 2021 and oversaw the bank through the merger process, which transformed the institution into a financial conglomerate.

Strong growth, margin pressure

The leadership change comes against the backdrop of HDFC Bank’s recent financial performance, which has been shaped by post-merger adjustments.

For the third quarter of FY26, the bank reported net profit growth in the high single digits year-on-year, continued expansion in advances, particularly in retail and SME segments. However, net interest margins (NIMs) remained under pressure due to elevated cost of funds and integration-related balance sheet adjustments.

The shares of HDFC Bank ended 0.40% lower at ₹842 apiece on the national stock exchange on Wednesday, March 18. The private lender's stock has fallen nearly 4% during the past year, underperforming the Nifty Bank index which has risen over 11% during the period.