HDFC Bank, the largest private lender, has approved the appointment of external law firms, both domestic and international, to scrutinize the resignation letter of former part-time Chairman and Independent Director, Atanu Chakraborty. This decision, made during a Board meeting on March 23, aims to enhance governance standards. The law firms will assess the contents of Chakraborty’s resignation and present their findings within a reasonable timeframe, as stated in an exchange filing by the bank.
Describing this move as proactive, HDFC Bank emphasizes its dedication to transparency and strong corporate governance practices. Chakraborty resigned on March 18, citing that certain developments within the bank in the past two years did not align with his personal values and ethics. However, the bank clarified that he did not specify any particular incidents or practices conflicting with his values.
Chakraborty has clarified that his departure was not related to any misconduct within the bank but stemmed from differences in ideologies and approaches. Appointed to the bank’s board in 2021, he resigned with immediate effect. Following his resignation, the Reserve Bank of India (RBI) has appointed Keki Mistry as interim part-time Chairman for three months starting March 19. Mistry has assured that there are no significant concerns for the bank post-Chakraborty’s exit.
The external review, initiated by HDFC Bank, aims to bolster governance oversight and provide clarity regarding the circumstances surrounding the resignation. Additionally, the bank reportedly terminated three employees, including senior executives, after an internal investigation into the alleged mis-selling of high-risk AT1 bonds to NRI clients through its overseas operations.
Shares of HDFC Bank saw a rise of over 3% on Tuesday, trading at Rs 767.75 and hitting an intra-day high on the BSE as of 10 am. The banking stock had experienced an 11.73% decline between the close on March 18 and March 23.
