HDFC Financial institution board could now give attention to the reappointment of Sashidhar Jagdishan as MD and CEO

Simply three days after an impartial authorized overview into the issues flagged within the resignation letter of former chairman Atanu Chakraborty discovered no proof to substantiate his claims, HDFC Financial institution has appointed former IAS officer and ex-Chief Election Commissioner Rajiv Kumar as the brand new part-time chairman.

With the brand new chairman now in place, the main target will now shift to the reappointment of Sashidhar Jagdishan because the MD and CEO, along with his time period set to finish in October.

HDFC Financial institution was thrown into form of a disaster in March, when then part-time chairman Atanu Chakraborty resigned abruptly citing that “sure happenings and practices” throughout the financial institution noticed over two years, have been “not in congruence” along with his private values and ethics,

Appearing swiftly, the nation’s second largest lender appointed group veteran Keki Mistry because the interim chairman. Individually, exterior legislation companies have been roped in to conduct a authorized overview to guage if any concern was evident as raised within the assertion made by Chakraborty in his resignation letter, and if Chakraborty recorded any dissent, and whether or not it was addressed. 

On the identical time, the lender started a seek for a brand new part-time chairman. 

The authorized overview performed by Wilson Sonsini Goodrich & Rosati, P.C. and Wadia Ghandy & Co. concluded that no contemporaneous help for Chakraborty’s assertion was discovered within the board or board committee minutes or supplies reviewed, or in contemporaneous communications in regards to the overview and approval of the minutes of conferences he attended. 

With the authorized overview giving a clear chit to HDFC Financial institution, the financial institution has now moved to nominate Rajiv Kumar as the brand new part-time chairman, whose appointment would require approval from the Reserve Financial institution of India. He has been appointed because the part-time chairman for 3 years. 

Kumar has additionally been appointed as an extra impartial director of HDFC Financial institution 4 years with impact from June 30, 2026 and that can want approval from shareholders. 

His appointment as part-time chairman might be efficient from the date as authorised by the RBI. 

Key activity forward

With the authorized overview discovering no benefit within the issues raised by Chakraborty, and a brand new part-time being appointed, the HDFC Financial institution’s board could now provoke the method of clearing the third time period for MD and CEO Jagdishan. 

Jagdishan’s present time period ends in October. He was first appointed because the MD and CEO of HDFC Financial institution for 3 years in October 2020, when he succeeded the lender’s lengthy standing chief Aditya Puri. His tenure was renewed by one other three years in October 2023.

On the renewal of Jagdishan tenure, Kaizad Bharucha, the financial institution’s deputy managing director stated in April following the lender’s earnings announcement for the January-March quarter, that the board is “seized up” of the matter.

Jagdishan himself has reportedly stated earlier that he could also be prepared to be reappointed ought to the board determine. 

With the authorized overview achieved and now a brand new chairman additionally introduced, the board could now velocity up the choice on his reappointment. Nonetheless, Jagdishan’s reappointment will even require the approval from the RBI. 

It was underneath Jagdishan’s management that the merger of HDFC Financial institution and guardian HDFC was efficiently executed. Jagdishan has been with the financial institution since 1996.