Nearly two weeks after stepping down from HDFC Bank, has said his decision to resign was driven by a growing mismatch between his views on values and ethics and what he observed at the bank over time.
In his, Chakraborty told CNBC-TV18 that there was no single trigger behind his exit. Instead, he said the decision came after a period of discomfort, which he described as an “incongruence” that eventually led to a dilemma.
“I have used the word incongruence with my value and ethics. My value and ethics are very different from that,” he said in the interview with CNBC-TV18.
Chakraborty, who served as a non-executive chairman, said the decision should not be seen as linked to one event or a specific date.
“Leave aside the date even a month later would have had as much speculation,” he said, indicating that the issues had been building up over time rather than arising suddenly.
He explained that his role as an independent director came with responsibilities around ensuring high standards of integrity, transparency and accountability, both for shareholders and depositors.
“Customer is the God,” he said, adding that banks must focus on long-term relationships rather than short-term or transactional gains.
While Chakraborty did not disclose detailed boardroom discussions, he referred to issues in the bank’s Dubai operations as one example already in the public domain.
He pointed to concerns around customer onboarding practices that had come under regulatory scrutiny since 2018.
Referring to comments by the bank’s chief executive who had described the issue as a “technical lapse”, Chakraborty said he viewed it differently.
“If a large number of customers are hurt it also brings reputational risk to the bank,” he told CNBC-TV18.
He added that such issues should ideally not arise in the first place, and if they do, should be addressed early.
“I feel that these conduct issues should not arise at the first place or should be nipped in the bud,” he said.
He also raised a broader point on oversight, saying that systems should focus on preventing issues before they occur, rather than only acting after problems surface.
Apart from governance concerns, Chakraborty also pointed to areas of underperformance.
He said that the bank’s share price had not performed as expected, which meant shareholder value was not being fully maximised. He also mentioned lower CASA levels and a higher cost-to-income ratio as areas of concern.
These factors, he said, were important given the responsibility of independent directors to protect shareholder interests.
At the same time, he dismissed suggestions that these issues were linked to the merger with HDFC Ltd, calling it a well-executed step that improved the bank’s asset side.
Throughout the interview, Chakraborty stressed that his concerns were rooted in broader principles rather than isolated incidents.
He said independent directors are expected to uphold values such as honesty, fairness and accountability, and ensure that management decisions align with the interests of customers, shareholders and the wider system.
He also highlighted the importance of strong internal systems and incentives that prevent risky behaviour, rather than relying only on corrective action after issues arise.
“There has to be a priori conduct ideally, event should not occur,” he said, explaining that prevention is more important than response.
Chakraborty said that when there is a difference in views on such core issues, it can place an individual in a difficult position.
“And I felt that if there is an incongruence, one lives in a dilemma,” he said.
He added that as an independent director, he did not seek to impose his views on others, but chose to step down when the gap in thinking became difficult to reconcile.
Despite his exit, Chakraborty said he continues to have faith in the bank’s middle management, which he described as energetic and capable, and said they would play a key role in shaping its future.