HDFC Shares Fall 5% After Chairman Quits Over Ethics
Synopsis
HDFC Bank Chairman Atanu Chakraborty resigned on March 18, 2026, saying certain practices inside the bank over two years did not align with his personal values and ethics. He gave no specific details and the board says no evidence was shared with them. HDFC Bank shares fell nearly 9% on the National Stock Exchange, hitting a fresh 52-week low, while US-listed shares dropped over 7%. The bank said the resignation has no link to any regulatory issue. Keki Mistry has been named interim chairman for three months with Reserve Bank of India approval.
The HDFC Bank chairman, Atanu Chakraborty, resigned on March 18 amid ethics concerns inside the bank that sent shares tumbling nearly 5% in India and 7% in the United States. Keki Mistry will take position as interim chairman during the period of three months.
Key Highlights
- HDFC Chairman Atanu Chakrabortu stepped down, citing ethical concerns in the bank.
- He said that some of the practices he observed during the two years were counter to his own values.
- Shares listed in the United States dropped more than 5% on the New York Stock Exchange.
- Keki Mistry was appointed interim chairman for a period of three months.
HDFC Chairman Exits, Accusing Bank of Internal Ethics Issues
On Wednesday night, India’s largest private bank got a jolt. HDFC Bank’s part-time chairman Atanu Chakraborty resigned with immediate effect, citing things he witnessed during his two years at the bank didn’t sit well with him.
Chakraborty, in his resignation letter, said some activities and practices at the bank were contrary to his personal values and ethics. He provided no names, no particulars and no other details. He simply said there was no additional reason for his departure other than what he had written.
Reason for Resignation Remains Unknown
The bank held an investor call on Thursday to attempt to calm things down. It did not go very well.
Chakraborty had not shared any evidence or specifics about the alleged practices he was referring to, interim chairman Keki Mistry told investors. The RBI said the resignation had nothing to do with any regulatory issue or RBI concern. But without clarity about what happened, investors were left to make their own assumptions, and the markets reacted poorly.
Shares Touched Another 52-Week Low
The market’s reaction was swift. Shares of HDFC Bank opened at Rs 770 on Thursday and had dropped hitting a new 52-week low on the National Stock Exchange. U.S. shares of HDFC Bank dropped some 7% on the news. The market value of investors came down by more than Rs 1 lakh crore in one session.
The chairman’s departure added pressure already on the stock, JPMorgan said, and it was likely to be weak in the near term. Before this, the stock had already tumbled 8% over the past month and 15 per cent year to date.
Who Chakraborty Is and Who Replaces Him
Chakraborty also became part-time chairman of the board of HDFC Bank in May 2021. He was reappointed in 2024 for a new mandate until May 2027. He was a senior Indian civil servant before he took to banking, a 1985-batch IAS officer who had been Secretary at the Department of Economic Affairs.
It was during his time at the bank that he supervised the $40 billion merger of HDFC Bank with its parent, HDFC Ltd, leading to the new combined firm being India’s number 2 lender. He mentioned in his resignation letter that the full benefits of that merger were still awaiting to come through. HDFC’s ex-head before the merger, Keki Mistry, had been appointed interim part-time chairman for three months with RBI sanction.
FAQs
- Why did the chairman resign?
He said some of the practices inside the bank over the last two years were inconsistent with his personal values and ethics. FAQs
- Why did the chairman resign?
He said some of the practices within the bank over the past two years did not align with his personal values and ethics.
- Did he give specific details?
No. He did not provide names or examples, and the board says he offered no evidence.
- How much did the shares fall?
Even though, 9% in India and at a 52-week low; more than 5% on the US stock exchange.
- Is this related to any regulatory issue?
The bank says no. The RBI further said the bank’s finances are in good shape, and that its management is sound.
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