HDFC Bank Ltd. named former finance secretary, Rajiv Kumar, as its part-time chairman, months after the abrupt resignation of his predecessor sparked questions over governance issues at India’s largest private-sector lender.
Kumar’s appointment is subject to approval from the Reserve Bank of India, the Mumbai-based bank said in an exchange filing on Monday.
Indian lenders frequently appoint retired bureaucrats or central bankers as board chairs, betting their expertise in public administration, policymaking and regulatory affairs would help navigate the country’s complex institutional and policy landscape.
HDFC Bank, which counts foreign institutional investors among its major shareholders, plunged into a crisis in March after former bureaucrat Atanu Chakraborty stepped down as part-time chairman, citing “certain happenings and practices” at the lender that were not in line with his “personal values and ethics.” The bank said at the time it had well-established governance frameworks.
The resignation unsettled investors, wiping billions of dollars from HDFC Bank’s market value. The shares are underperforming its key peers since then. It marked another setback for the lender, coming a few years after it was caught up in the fallout from Credit Suisse’s additional tier‑1 bonds.
The bank subsequently named Keki Mistry, a bank director and a veteran of India’s financial industry, as interim chairman.
Earlier this month, HDFC Bank said an independent legal review found no evidence to substantiate Chakraborty’s allegations, citing inconsistencies in his statements.
The focus now shifts to the most important leadership milestone – Chief Executive Officer Sashidhar Jagdishan’s appointment and whose term expires in October, Macquarie analyst Suresh Ganapathy said in a note. “In our view, continuity is likely to take priority with Sashidhar Jagdishan set to be reappointed for another 3-year term.”
Kumar will serve for three years once the central bank grants approval. He was also appointed as an additional independent director on the board. Kumar retired as finance secretary in 2020 and was later India’s chief election commissioner, overseeing the 2024 general election.
As finance secretary from 2017 to 2020, Kumar oversaw the consolidation of 10 public sector banks into four larger entities, administered the government’s bank recapitalization program and played a key role in cleaning up the banking sector.
Separately, HDFC Bank named Axis Bank executive Puneet Sharma as its chief financial officer, effective Dec. 1.
This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.