HDFC Bank managing director and CEO Sashidhar Jagdishan has decided not to seek reappointment after his current term ends on October 26, the country’s largest private sector lender said in a regulatory filing.
Jagdishan, 61, will retire on October 26 after nearly three decades with the bank. He became CEO in October 2020 and is currently serving his second three-year term.
The HDFC Bank board will speed up the process of selecting and appointing his successor and complete it “well within time”, the filing said.
Jagdishan informed the board that he did not want to seek another term and maintained his decision despite the board trying to persuade him to continue.
The bank said the board appreciated his leadership, commitment and contribution to its growth and stability, as well as his role in completing one of the biggest mergers in corporate India. It also wished him well for the future.
Jagdishan took over from Aditya Puri
Jagdishan took over as HDFC Bank CEO from Aditya Puri, who had led the bank since its establishment in 1995.
Soon after Jagdishan became CEO, HDFC Bank announced the merger of its parent company, mortgage lender HDFC, with the bank. The merger significantly increased the bank’s asset base and raised concerns over business performance, higher liability costs and lower net interest margins.
However, the management said the merger would bring benefits in the long term.
Reappointment became a matter of speculation
Jagdishan’s reappointment had been the subject of intense speculation, particularly after non-executive chairman Atanu Chakraborty suddenly resigned in March, citing concerns over ethics and governance practices at the bank.
In late July, the bank’s board found shortcomings in its deposit arrangements with the Maharashtra State Road Development Corporation (MSRDC). It also imposed a ₹1 lakh fine each on Jagdishan and other senior executives, while saying their actions were not mala fide.
The bank was accused of paying more than the card rate to secure high-value deposits from the state-run body and showing the additional payments as marketing expenses.
AT-1 bond case also raised concerns
HDFC Bank has also faced allegations of mis-selling Credit Suisse AT-1 bonds to diaspora clients through its Dubai DIFC branch. The local regulator barred the bank from onboarding new customers or conducting new business there last year.
After his sudden resignation, Chakraborty said the bank had failed to act quickly enough in the AT-1 bond case. He also said compensation practices should match the bank’s values to prevent such mis-selling.
There have also been reports of non-resident Indians being unable to access more than USD 100 million invested through a platform launched by Carlisle Asset Management. The product was marketed as a high-yield investment, but clients have reportedly been unable to redeem their money.
Jagdishan also faced allegations in Lilavati case
During his tenure, Jagdishan faced allegations of graft in the Lilavati Hospitals matter. The case was eventually dismissed by the Bombay High Court.
RBI restrictions lifted in 15 months
In December 2020, the RBI barred HDFC Bank from sourcing new credit card customers and launching new digital initiatives after repeated technology-related outages.
Under Jagdishan’s leadership, the bank addressed the issues and the RBI restrictions were completely lifted within 15 months.
