Clarity, not comfort

RBI must get to the bottom of the differences between the former chairman and the top team at HDFC Bank.

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A TANU CHAKRABORTY'S RESIGNATION as part-time chairman of HDFC Bank should have been accompanied by a far more detailed explanation. Simply stating that "certain practices and happenings within the bank are not in congruence with my personal values and ethics" is inadequate. For an institution of HDFC Bank's size and systemic importance, such ambiguity is not just unsatisfactory-it risks being seen as irresponsible, leaving investors and depositors to read between the lines. To its credit, the Reserve Bank of India (RBI) has moved swiftly to steady sentiment, approving the appointment of an interim part-time chairman for three months. Its assertion that the bank's financials remain sound and that there are no material concerns regarding governance or conduct is reassuring. Given the RBI's overarching supervisory role, its word carries weight. In effectively endorsing the bank's credentials, the regulator has provided an important measure of stability.