HDFC Bank MD & CEO Sashidhar Jagdishan is not going to seek a third term in office. Jagdishan will be retiring on Oct. 26, ending his six-year tenure as chief of the country’s largest private lender. He is said to have conveyed his decision to the bank’s board on Saturday.
The board, on its part, held an unscheduled meeting to persuade him to reconsider, but Jagdishan is reported to have reiterated his decision not to seek another term.
This development is significant, as Jagdishan had indicated his willingness for a third term a few months back. The speculation further gathered strength after the recent meeting between HDFC chairman Rajiv Kumar and RBI Governor Sanjay Malhotra over Jagdishan’s possible reappointment to the post. Sources indicate that Jagdishan’s change of mind may have been triggered by indications that a full third term was not forthcoming. He is said to have met HDFC Bank chairman Rajiv Kumar early on Saturday.
Jagdishan’s decision comes in the backdrop of a series of governance and operational issues that put the bank under scrutiny. It happened after the resignation of former chairman Atanu Chakraborty, who stepped down citing “values and ethics.” After his resignation, the bank fired three senior executives and penalised several others over irregularities in the sale of high-risk bonds of failed Credit Suisse to non-residents in 2019-2022.
Similarly, the bank fined Jagdishan, CFO Srinivasan Vaidyanathan, and the head of its retail assets group Rs 1 lakh each in July over what the bank described as “business overreach” in obtaining bulk deposits from MSRDC.
Recently, HDFC Bank came under fire from customers who had invested in a failed Carlisle fund that invested in acquired life insurance policies, mounting pressure on the bank.
Then came several restrictions imposed on the bank by the RBI. After the restrictions were lifted, Jagdishan began to steer the bank through the integration of HDFC Ltd. at a time when a merger with interest rates at historic lows and the banking system being flush with liquidity became more challenging as the Russian invasion of Ukraine triggered a sharp rise in interest rates and tighter liquidity conditions.
That is the reason why the board thanked Jagdishan for his leadership and contribution to the bank’s growth and stability, particularly for his role in completing the merger with HDFC Ltd, one of the largest corporate mergers in India. The board said it would fast-track the process of appointing his successor well before his retirement.
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