ICICI Bank veteran Anup Bagchi’s appointment as the new Chief Executive Officer (CEO) of HDFC Bank has been approved by the Reserve Bank of India (RBI). Bagchi will have a three-year term beginning later this month.
He will be succeeding Sashidhar Jagdishan after his term ends on October 27. Jagdishan had voiced his unwillingness to seek reappointment as CEO.
Bagchi, currently serving as Managing Director and CEO of ICICI Prudential Life Insurance, has been at the helm of the insurer since 2023. His association with ICICI bank started way back in 1992.
The duration of 20 days in which the RBI cleared Bagchi’s appointment bears significance as the central bank normally takes three to six months to clear the appointment of a bank CEO. HDFC Bank had sent its proposed names to the RBI only on Sep 12.
In the past, the RBI had approved Anup Saha’s appointment as Kotak Mahindra Bank’s new CEO more than six months after the bank submitted its proposed names.
HDFC Bank, the country’s largest private sector bank and the second-largest lender after SBI, said in a regulatory filing on Thursday that the RBI had accepted its proposal dated September 12 recommending two names for approval.
Though the bank did not name the candidates, the names were widely believed to be those of deputy managing director Kaizad Bharuacha and Bagchi.
Thus, the RBI’s decision marks the end of Bharuacha’s aspirations to become the bank’s CEO. He is already 61 and has been on the board for 13 years. The RBI caps a continuous board position at 15 years.
This is also the second time Bharuacha has missed the opportunity. He was earlier considered a frontrunner for the top post when founding CEO Aditya Puri retired in October 2020.
But it does not mean that Bagchi’s appointment is final, as it must be approved by shareholder and the bank’s board. The board said on Thursday that it would create a fourth whole-time director position in connection with his appointment.
Bagchi will now have to deal with a series of governance and regulatory issues faced by HDFC Bank, including the resignation of former part-time chairman Atanu Chakraborty and the RBI’s action over the bank paying a higher-than-approved interest rate to attract deposits from a state government entity.
It is important as the former bank’s CEO and CFO were each penalised Rs 1 lakh in the matter.
Besides, the bank is also facing legal proceedings over allegations concerning the mis selling of substandard debt of failed Swiss lender Credit Suisse to foreign investors, primarily in the Middle East.
These developments have weighed on HDFC Bank’s shares, which are trading near multi-year lows. The bank has the largest weight in both the Nifty and Sensex.
With Bagchi’s appointment as the new chief, the bank is set to enter a new phase under a leadership team that has undergone several changes in recent months.
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