Reserve Bank of India (RBI) on Wednesday says it has not found any material governance or conduct-related concerns at HDFC Bank, offering reassurance to investors following the recent resignation of its chairman and volatility in the lender’s stock.
Responding to queries after the monetary policy announcement, RBI governor Sanjay Malhotra says the central bank’s supervisory assessment did not flag any issues of concern.
“Based on our general supervision, we have not found any material governance concerns in HDFC Bank,” Mr Malhotra says, adding that RBI had also reviewed board meeting minutes of the Bank without identifying any red flags.
He reiterated that the central bank had earlier, in its 19 March 2026 communication, stated that there are no material concerns on record regarding the Bank’s conduct or governance.
The clarification comes in the backdrop of the sudden resignation of HDFC Bank's former chairman Atanu Chakraborty in March which triggered a sharp fall in the Bank’s share price and raised questions among investors.
Mr Chakraborty had stepped down, citing certain developments within the Bank that were 'not in congruence' with his personal values, though he did not point to any specific governance lapses or irregularities.
Following his exit, RBI approved the appointment of Keki Mistry as interim chairman for a three-month period.
Subsequently, HDFC Bank appointed external law firms to independently review the circumstances surrounding the resignation, describing it as a proactive step to reinforce governance standards and transparency.
RBI Proposes Board-level Reforms
Alongside its reassurance on HDFC Bank, RBI also signalled broader reforms aimed at improving governance practices across banks.
The central bank says it plans to revise and rationalise the matters that require board-level attention, enabling directors to focus more on strategic oversight rather than operational issues.
“We propose to revise and rationalise matters that require the attention of the board. This will result in boards being able to divert more time to policy matters, leaving operational matters to the management,” Mr Malhotra says.
The move follows a comprehensive review of existing instructions governing board oversight, with draft directions expected to be issued soon for public consultation.
RBI noted that currently, boards determine matters placed before them based on broad regulatory themes, along with specific mandates from the central bank for approvals and reviews.
The proposed rationalisation aims to streamline these requirements and enhance the quality of board-level engagement, particularly on strategy and risk governance.
Despite recent developments, RBI reiterated that HDFC Bank remains a systemically important institution with strong fundamentals, adequate liquidity and sound management practices.
The Bank has also clarified that recent internal actions, including employee exits linked to mis-selling concerns in overseas operations, do not have any material impact on its financial position or governance framework.
The central bank’s remarks, combined with ongoing internal reviews at the Bank, signal a broader emphasis on strengthening governance standards while maintaining stability in India’s banking sector.
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