Atanu Chakraborty quits as HDFC Bank chair citing ‘ethical concerns’, shares tank 9 pc

Shares of HDFC Bank dived nearly 9 per cent on Thursday (March 19) morning trade after Atanu Chakraborty resigned as chairman of the country’s second biggest lender citing “ethical concerns”.

“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.

In a letter addressed to Chairman of Governance, Nomination, Remuneration Committee HK Bhanwala, Chakraborty said: “There are no other material reasons for my resignation other than those stated above.”

HDFC shares tank 9 pc

On Thursday morning, shares of HDFC Bank dived nearly 9 per cent. The blue-chip stock tanked 8.41 per cent to Rs 772—its 52-week low—on the BSE.

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At the NSE, the stock tumbled 8.66 per cent to hit the 52-week low of Rs 770. The company’s market valuation eroded by Rs 65,176.48 crore to Rs 12,31,666.45 crore.

The stock emerged as the biggest laggard among the BSE Sensex and NSE Nifty firms.

Keki Mistry appointed interim part-time chairman

In a late evening filing, HDFC Bank said Chakraborty on March 18 tendered his resignation as the Part-time Chairman and Independent Director of the Bank with immediate effect.

Further, the filing said, based on an application made by the bank, the Reserve Bank of India on March 18 granted its approval for the appointment of Keki Mistry as an interim part-time chairman of the HDFC Bank with effect from March 19, for a period of three months.

It is to be noted that Chakraborty was appointed part-time chairman effective May 5, 2021, almost a year after his retirement as Economic Affairs Secretary. His term was extended for another three years in 2024 till May 4, 2027.

Former IAS officer

Chakraborty, a 1985 batch IAS officer of Gujarat cadre, retired as Secretary of Department of Economic Affairs in April 2020. Prior to that, he was Secretary of the Department of Investment and Public Asset Management (DIPAM). Both departments come under the Finance Ministry.

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Chakraborty became chairman during the reverse merger process of the bank with the parent entity HDFC Ltd, a leading mortgage firm in the country.

The merger of HDFC Ltd. with HDFC Bank became effective on July 1, 2023, creating a financial behemoth with a combined balance sheet of over Rs 18 lakh crore.

Praise for middle, junior levels of organisation

“I joined the Board of HDFC Bank in May 2021. My tenure on the Board saw momentous events like the merger of the bank with HDFC Ltd that created a conglomerate under the bank. This strategic initiative made HDFC bank the second largest Bank in the country. Though, the benefits of merger are yet to fully fructify,” he said in his resignation letter.

While expressing gratitude to all the independent directors and non-executive directors, he said there is a great amount of energy and verve in the middle and junior levels of the organisation, that should form the core of a reimaged organisation.

(With agency inputs)