The bank’s board, while taking note of Jagdishan’s decision, said it would “fast-track the process for selection and appointment of his successor well within time”.
Deputy managing director Kaizad Bharucha is the bank’s senior-most executive and is seen as a leading internal contender to succeed Jagdishan.
The board is required to recommend at least three candidates to the Reserve Bank of India for approval. This could include external candidates.
“Despite persuasion, Jagdishan reiterated his decision not to seek reappointment,” the bank said.
The decision follows months of uncertainty over Jagdishan’s future at the bank.
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Questions over his continuation intensified in March after former chairman Atanu Chakraborty exited the bank, citing governance concerns.
At the time, Jagdishan sought to reassure investors, saying he was willing to continue if the board recommended his name for another term.
An external legal review report submitted at the end of June said it found no evidence supporting the former chairman’s resignation concern.
However, a board meeting held in July after the approval of the June-quarter results ended without any announcement on his reappointment, fuelling speculation over his reappointment.
Indications of Shorter Tenure
On July 23, shortly after Rajiv Kumar took over as the chairman, the board completed an internal review of the bank’s arrangements with Maharashtra State Road Development Corporation for mobilisation of deposits in 2017 and 2021. The review concluded that the conduct of certain employees amounted to “business overreach”, although it found no conclusive evidence of mala fide intent, personal enrichment or any improper motive.
The board, subsequently, issued warning letters and imposed monetary penalties of ₹1 lakh each on Jagdishan, chief financial officer Srinivasan Vaidyanathan and the group head for retail assets, Arvind Vohra, citing potential divergence from applicable RBI directions.
The action marked the first time HDFC Bank’s board had penalised a sitting chief executive.
Sources familiar with the matter said Jagdishan decided against seeking an extension after receiving indications that the RBI was considering a shorter tenure than that sought by the board.
Jagdishan, who joined in 1996, is due to retire on October 26. He succeeded Aditya Puri as managing director and chief executive in 2020. His departure comes at a time when the long-serving chief financial officer, Vaidyanathan, is also set to complete his term in October.
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