Former HDFC Bank Ltd. chairman Atanu Chakraborty has provided further detail on the ethical disagreements that led to his abrupt resignation earlier this month. This comes on the back of him singling out the bank’s handling of regulatory lapses in Dubai as a key area of concern.
In an interview on Monday shared by Bloomberg, Chakraborty highlighted issues flagged by the Dubai regulator last September, which resulted in the bank being restricted from adding new clients in the emirate. The matter ultimately triggered the departure of around a dozen executives, including the former compliance officer and chief internal auditor.
He expressed discomfort with the bank’s description of the problems as a mere “technical lapse,” saying such framing “doesn’t really add to the standards of ethics” and that “these practices are not rooted in values.” Chakraborty described an “incongruence” between his personal value framework and the bank’s approach, adding that “when such a dilemma arises, it becomes a personal decision.”
His comments build on the resignation letter of March 18, in which he cited “certain happenings and practices” not aligned with his ethics or personal values. While he initially softened his tone in a television interview, Chakraborty now stands firm on the broader concerns. He stressed that the decision was not driven by any single incident: “It was not issue-based.”
A major underlying cause of the rift was client losses tied to Credit Suisse’s Additional Tier 1 (AT1) bonds, which were written down after the Swiss bank’s collapse in March 2023, according to people familiar with the matter.
The resignation has already wiped approximately $21 billion from HDFC Bank’s market value and triggered renewed scrutiny of boardroom dynamics at India’s largest private sector lender. The bank has since appointed external lawyers to review the issues raised in Chakraborty’s letter.
HDFC Bank did not immediately respond to requests for comment on the former chairman’s latest remarks. The lender, led by CEO Sashidhar Jagdishan, continues to maintain that its governance practices remain robust and that strategic priorities, including loan growth, deposit mobilisation and post-merger integration, are on track. The Reserve Bank of India has also moved quickly to reassure markets that the bank remains well-capitalised and operationally sound.
Chakraborty, who previously served as India’s economic affairs secretary, oversaw one of the most transformative periods in the bank’s history following its 2023 merger with Housing Development Finance Corp. He noted that board-level discussions also covered operational and performance metrics such as deposit growth, cost of funds and shareholder returns, underscoring that independent directors must consider not only compliance but also the broader interests of shareholders and depositors.
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