HDFC Bank appoints law firms to probe Atanu Chakraborty resignation

HDFC Bank said on Tuesday that it has appointed domestic and international law firms to conduct an independent legal review to investigate reasons cited by its former part-time chairman, Atanu Chakraborty, in his resignation letter last week. Chakraborty stepped down citing differences related to “values and ethics”.

In a regulatory filing before market hours on Tuesday, the private sector lender noted that Chakraborty’s letter did not flag any specific incidents or practices that conflicted with his personal principles, adding that no additional material reason was cited beyond what had already been disclosed.

In his resignation letter, Chakraborty also mentioned certain developments and practices that he had observed over the past two years that were not aligned with his personal values and ethics. However, he also wrote that there were no other material reasons behind his decision.

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The bank also said that the appointment of external legal firms will ensure an objective and independent review of the contents of the resignation letter while reinforcing its governance framework.

"We wish to inform you that, Mr. Chakraborty did not mention any happenings and practices which were not in congruence with his personal values and ethics," read the filing to exchanges.

"To reinforce the robust governance standards of the Bank, the Board of Directors of the Bank at its meeting held on March 23, 2026, took a proactive step and approved the appointment of external law firms (domestic and international), to conduct review regarding Mr. Chakraborty’s resignation letter. The said law firms have been advised to provide their report on the same within a reasonable period of time," it added.

What regulators say

Asked why SEBI has not initiated a probe despite the mention of governance issues, its Chairman Tuhin Kanta Pandey said on Monday that merely flagging ethics or governance concerns in a resignation letter does not constitute sufficient grounds for regulatory action.

Unless concerns are clearly specified, accepted by the board, and recorded in board minutes, they cannot be considered by the regulator.

The SEBI chief also emphasised that any such allegations must be specific and clearly articulated, rather than vague or general in nature, underlining that concerns should be formally presented before the company’s board.

As per SEBI’s disclosure norms, listed companies are required to duly record such issues in board meeting minutes.

Earlier, the RBI said HDFC Bank remains a domestic systemically important bank with sound financials, a professionally run board, and a competent management team. Based on its periodic assessments, there are “no material concerns” regarding the bank’s conduct or governance, noted the banking regulator.

The RBI also said that HDFC Bank remains well capitalised with a satisfactory financial position.

Keki Mistry takes interim charge

Last week, HDFC Bank named eminent banker and group veteran Keki Mistry as interim non-executive chairman for three months after Atanu Chakraborty’s abrupt resignation. Mistry said on a call with investors that there had been no discussion regarding governance within the bank’s board and that he was not aware of the issues raised by Chakraborty in his resignation letter.

Chakraborty's term was originally scheduled to end in May 2027.

Meanwhile, HDFC Bank has removed its branch banking head Sampath Kumar, along with EVP Harsh Gupta and SVP Payal Mandhyan, allegedly in connection with the Credit Suisse AT-1 bond mis-selling case, according to sources. The action followed complaints from some investors who alleged they were sold AT-1 bonds as fixed maturity and assured return products.