A review into governance practices at HDFC Bank has found no major lapses, reported news agency Reuters, citing people with direct knowledge of the matter.
The internal review was commissioned after , citing “incongruence” between his personal values and the bank’s practices. The resignation, which did not include specific details, triggered concerns around governance at India’s largest private lender and weighed on investor sentiment.
Mumbai-based law firms Trilegal and Wadia Ghandy & Co were tasked with examining board proceedings over the past three years, including minutes and video recordings of meetings. The review aimed to assess whether any governance issues had been raised internally and how they were addressed.
According to sources quoted in the report, all matters flagged at the board level were handled in line with prescribed processes, with no material lapses identified.
The firms are expected to submit their findings to the bank’s board later this month, after which the report will be shared with the Reserve Bank of India (RBI).
The outcome of the review is significant for HDFC Bank, which serves around 120 million customers and accounts for a substantial share of India’s banking deposits.
The uncertainty following Chakraborty’s exit had briefly and prompted a rare public reassurance from the central bank.
The review had also delayed a decision on recommending CEO Sashidhar Jagdishan for another term, with his current tenure set to end in October. With the findings indicating no major governance concerns, the bank is now expected to move ahead with proposing his reappointment, subject to regulatory approval.
People familiar with the central bank’s thinking indicated that, based on its periodic assessments, there are no material governance concerns that would hinder the process. If the law firms’ conclusions align with regulatory views, approval is unlikely to face significant hurdles.
The episode, however, has highlighted underlying leadership tensions at the bank, which has faced investor scrutiny following its merger with parent HDFC Ltd in 2023 and relative underperformance compared to peers such as ICICI Bank and the benchmark Nifty 50.
While the review findings may help restore confidence, they also mark the close of a phase that briefly put the spotlight on governance standards at one of India’s most systemically important financial institutions.