Mumbai: HDFC Bank Ltd. named Sashidhar Jagdishan as its new chief executive officer, breaking almost three decades of continuity under his predecessor at a time when the coronavirus pandemic is roiling India’s financial sector.
The Reserve Bank of India cleared Jagdishan’s appointment for a three-year term starting Oct. 27, HDFC Bank said in an exchange filing on Tuesday. He replaces Aditya Puri, who had 26 years at the helm and will retire when he turns 70, the age limit set by the RBI for private-sector bank chiefs.
Jagdishan will face the challenge of maintaining HDFC Bank’s relatively high asset quality and loan growth as the pandemic sends the Indian economy into a deep slump. The nation’s biggest lender by market value has managed to skirt a two-year-old shadow-banking crisis under Puri. HDFC Bank shares were up 4% as of 12:24 p.m. in Mumbai.
“The announcement of a successor should finally put to rest the uncertainty and speculation regarding succession planning at the bank,” said Saswata Guha, head of financial institutions’ ratings at Fitch Ratings. “He does have an edge as an insider, which is a positive for the business, but his ability to deliver continued superior performance -– that HDFC Bank is synonymous with — is probably what will be most keenly watched.”
Widely known as Sashi, Jagdishan joined the bank in 1996 as a manager in the finance department. Formerly chief financial officer, he is now the group head and strategic “change agent” of the bank. He oversees functions including finance, human resources, corporate communications and corporate social responsibility.
Jagdishan is more in the mold of the modern banker who depends on his team to fulfill his vision, unlike Puri, who is seen as more hands-on, according to people who know both the men. Jagdishan has focused mainly on managing the money while Puri has participated in lending decisions or winning business from clients, the people said, asking not to be identified in order to speak freely.
Jagdishan has been traveling to various branches over the past year with Puri’s blessing, to understand the bank’s business better, they added.
Attempts to reach Jagdishan through HDFC Bank’s representatives weren’t immediately successful.
Jagdishan will have to mold his own management team after some veterans recently left the bank, including vehicle lending head Ashok Khanna. The RBI has asked HDFC Bank to provide details of an internal investigation into allegations of improper lending at that business. – Bloomberg