In spotlight over governance, HDFC Bank CEO Sashidhar Jagdishan to step down

In spotlight over governance, HDFC Bank CEO Sashidhar Jagdishan to step down Despite persuasion, Jagdishan reiterated his decision to not seek reappointment, the bank remarked.

Key points

• The bank had a market capitalisation of Rs 11.10 lakh crore as of August 28, 2026.
• He joined as a manager in the finance function, became the Chief Financial Officer in 2008 and was central in the bank's financial and strategic functions.
• Subhash Chandra's Rs 6.5-crore settlement: What are 'haircuts' and how high can they obtain?
• What put the spotlight on the bank in March this year was the abrupt resignation of part-time chairman Atanu Chakraborty.
• The biggest test of Jagdishan's leadership was the merger of HDFC Ltd with HDFC Bank.

Sashidhar Jagdishan will step down as Managing Director and CEO of HDFC Bank, the country's largest private sector lender in October, bringing to an end a six-year tenure that included the institution's transformational merger with mortgage giant HDFC Ltd. The decision comes at a critical juncture for HDFC Bank. It is now preparing for a leadership transition even as questions around corporate governance and internal practices have come under scrutiny in recent months.

Jagdishan has decided not to seek reappointment as MD and CEO, HDFC Bank remarked in a regulatory filing on Saturday. After which he will retire from the services of the bank, his current term ends on October 26, 2026. The Board took note of Sashidhar Jagdishan's communication to not seek reappointment.

HDFC Bank 'camouflaged' crores as marketing spend to pay higher interest to state firm.

When the Reserve Bank of India approved Jagdishan's appointment to succeed Aditya Puri as MD and CEO, the development marks the end of a leadership chapter that began in October 2020. Jagdishan has been with HDFC Bank since 1996. He joined as a manager in the finance function, became the Chief Financial Officer in 2008 and was central in the bank's financial and strategic functions.

What put the spotlight on the bank in March this year was the abrupt resignation of part-time chairman Atanu Chakraborty. This person remarked certain happenings and "practices" within the bank were not in line with his "personal values and ethics". The bank subsequently appointed external law firms to examine the reservations raised in his resignation letter. The law firms submitted a report giving clean chit to the bank. The RBI too had given a clean chit to the bank saying it did not find any governance reservations.

Why this raises questions on HDFC Bank's governance and its code of ethics.

On May 27, The Indian Express documented that HDFC Bank's Audit Committee had ordered an internal vigilance investigation into payments totalling Rs 45 crore produced to the Maharashtra State Road Development Corporation's deposits during FY2024 and FY2025. The payments were allegedly routed through the bank's marketing department and presented as contributions to a road-safety campaign rather than as differential interest on deposits. The bank had denied the allegations relating to the documented payments. How Subhash Chandra's Rs 6.25-crore resolution proposal sailed through.

But in July, the bank's board concluded an internal disciplinary process relating to the MSRDC arrangement and issued warning letters and imposed a monetary penalty of Rs 1 lakh each on Jagdishan, Chief Financial Officer Srinivasan Vaidyanathan and Group Head of Retail Assets Arvind Vohra. The board characterised the conduct as "business overreach" rather than mala fide action, personal enrichment or improper motive, and decided that the matter should be communicated to the RBI.

Earlier in March this year, the bank had taken action against three executives, including Sampath Kumar, group head of branch banking, for their alleged involvement in mis-selling of Credit Suisse Extra Tier-1 bonds. The bank's executives were accused of inflating income details of NRI clients to qualify them for AT-1 bond purchases, a product typically reserved for high-net-worth investors. The bank had in September 2025 informed the stock exchanges regarding an action taken by the Dubai Financial Services Authority (DFSA) barring its Dubai International Financial Centre (DIFC) branch from onboarding new clients.

HDFC Bank chairman quits, cites ethical reservations, 'certain practices'.

Jagdishan's departure puts the spotlight on HDFC Bank's succession process. The bank had already appointed former Chief Election Commissioner Rajiv Kumar as chairman in June. The choice of the next CEO will therefore be closely watched by investors and regulators, particularly since HDFC Bank is still in the process of integrating the enormous HDFC Ltd franchise and recalibrating its balance sheet after the merger.

Now, with less than two months left in his tenure, the bank faces the task of finding a successor capable of taking the merged institution into its next phase – while restoring absolute confidence in its governance and internal controls.

For context, the biggest test of Jagdishan's leadership was the merger of HDFC Ltd with HDFC Bank. It became effective on July 1, 2023. The $40-billion all-stock transaction was described as one of the biggest deals in Indian corporate history. The merger brought India's largest housing finance firm into the country's largest private sector bank, creating a financial services institution with a combined asset base of more than Rs 18 lakh crore.

Jagdishan had argued that the enlarged balance sheet would allow the bank to participate more meaningfully in financing India's infrastructure and economic expansion. He additionally saw the mortgage business as a major opportunity, pointing out that only a small proportion of HDFC Bank's customers were sourcing their home loans through the bank.

For context, the bank had a market capitalisation of Rs 11.10 lakh crore as of August 28, 2026.

Taken together, the developments around in spotlight over governance, HDFC Bank CEO Sashidhar Jagdishan to step down point to a situation that is still moving, and the coming days should bring more clarity.