THE CEO WHO STAYED TOO LONG AT THE PARTY

Sashidhar Jagdishan’s HDFC Bank is unravelling — and the question India’s banking regulators can no longer avoid is whether to hand him another set of keys

- By Palak Shah [e-mail]

THERE IS A particular kind of institutional crisis that does not announce itself with a single bang. It accumulates. It surfaces in resignation letters written in careful bureaucratic language. It appears in stock charts that shed Rs 1.35 lakh crore in four trading sessions. It arrives in vigilance reports that nobody was supposed to read publicly, and in courtroom hearings where a bank’s top executive stands accused of financial impropriety before the charge is eventually quashed on a technicality. This is the story of HDFC Bank under Sashidhar Jagdishan — and it is not yet over.

Jagdishan’s term as Managing Director and CEO expires in October 2026. The Nomination and Remuneration Committee (NRC) has to recommend his third term to the Reserve Bank of India (RBI). The regulator, according to people familiar with the process, has made clear that it wants a permanent chairman in place before any such recommendation is finalised.

There is, as of today, no permanent chairman. The man who last held the post resigned in March citing “certain happenings and practices” that were “not in congruence” with his personal ethics. The bank has been operating with an interim chairman — Keki Mistry — since then.

The Reserve Bank of India is reportedly pushing the board to accelerate the chairman search. The board is moving slowly. And somewhere in this procedural tangle sits Jagdishan himself, whose fate as one of India’s most powerful bankers is now caught between an ethics storm he cannot fully extinguish and a regulator that appears to be in no rush to validate him.

The Scheme That Wasn't Marketing

To understand what cracked the edifice, you have to go back to 2021. HDFC Bank's senior management had identified a prize target: the Maharashtra State Road Development Corporation (MSRDC), a state infrastructure agency sitting on land acquisition funds estimated at Rs 25,000 crore.