Following his resignation last night, former non-executive chairman of HDFC Bank, Atanu Chakraborty, on Thursday, March 19, called the development a “routine matter”. He also declined to elaborate on the circumstances of his exit in a conversation with ANI.
Speaking to the news agency, Chakraborty said, “That’s (resignation) on the exchange website. Nothing worth discussion. It’s quite routine,” indicating that the details of his resignation have already been disclosed through official channels.
His resignation pushed HDFC Bank shares to their 52-week low level of ₹772 on the BSE today and significantly eroded investor wealth to the tune of ₹1.09 lakh crore. However, the stock of India’s largest private sector lender rebounded off the day’s lows following comments from the Reserve Bank of India (RBI) and HDFC Bank board allaying concerns on the lender’s financial health and governance practices.
Why did Atanu Chakraborty resign?
Chakraborty resigned as chairman of the country’s second biggest lender HDFC Bank, citing ethical concerns. This is the first time that the part-time chairman of HDFC Bank left mid-way, raising concerns over its functioning, PTI reported.
“Certain happenings and practices within the bank, that I have observed over the last two years, are not in congruence with my personal values and ethics. This is the basis of my aforementioned decision,” he said in his resignation letter dated March 17.
“There are no other material reasons for my resignation other than those stated above,” he said before calling his resignation as routine in nature.
Chakraborty, a former secretary, Department of Economic Affairs, Finance Ministry, had been serving as the Non-Executive Chairman of HDFC Bank, one of India’s largest private sector lenders.
RBI, HDFC Bank board ease concerns
Amid recent developments at HDFC Bank, the Reserve Bank of India and the lender’s board sought to reassure stakeholders, stating that the bank remains financially sound and well-governed.
The RBI said it has taken note of the recent developments and approved a transition arrangement regarding the position of Part-Time Chairman, as requested by the bank.
Emphasising the bank’s stability, the RBI noted that HDFC Bank, classified as a Domestic Systemically Important Bank (D-SIB), continues to have “sound financials, a professionally run board and a competent management team.”
It further added that based on its periodic assessment, “there are no material concerns on record as regards its conduct or governance.”
Furthermore, interim chair Keki Mistry earlier today said that there were “no power struggles within the bank“. “There could have been a relationship issue between Chakraborty and management. That may have manifested over a period of time,” Mistry said.
“Chakraborty’s resignation has nothing to do with the operational profitability of bank,” he added.
