- HDFC Bank is likely to name Deputy Managing Director Kaizad Bharucha as one of two options for its next CEO after incumbent Sashidhar Jagdishan retires at the end of his second term in October.
- India's largest private lender is also searching for an external candidate in keeping with a central bank rule requiring banks submit multiple names for the CEO position.
- The CEO search comes after about six months of upheaval at HDFC Bank where leadership issues have weighed on its shares.
- The price of HDFC Bank shares, which were about 40% foreign-owned as at June-end, has fallen 27% this year, with the decline accelerating after Chakraborty's departure.
- Bharucha had been widely tipped to continue as CEO before Atanu Chakraborty resigned as chairman in March saying practices at the bank were at odds with his "personal values and ethics".
- Last month, the board Jagdishan and three others in a separate matter related to the pricing of large deposits.
- Among the leading internal candidates is Bharucha, a long-serving executive overseeing the retail and wholesale businesses; he is not due to retire until 2029, making him eligible to be CEO under RBI rules.
HDFC Bank is in the process of selecting a new CEO as Sashidhar Jagdishan prepares to retire in October after his second term. The bank is considering Deputy Managing Director Kaizad Bharucha and an external candidate, adhering to a central bank rule that mandates multiple names for the position.178
The search for a new CEO follows a tumultuous six months for the bank, marked by leadership challenges that have negatively impacted its stock performance. HDFC Bank's shares have dropped 27% this year, with a notable decline after the resignation of Atanu Chakraborty, the former chairman, who cited governance issues that conflicted with his personal values.5
An external legal review corroborated Chakraborty's concerns regarding governance practices at the bank. The board has also faced scrutiny over the pricing of large deposits, further complicating the leadership transition. Bharucha, who has been with the bank for many years and oversees both retail and wholesale operations, is not set to retire until 2029, making him a strong internal candidate for the CEO role.
Investors are anxious about the lack of gains from a merger in 2023 with then-parent HDFC Ltd., which has added to the pressure on the bank's leadership and stock performance. The upcoming appointment of a new CEO is seen as critical for restoring investor confidence and stabilizing the bank's operations.
“The CEO search follows about six months of upheaval, with shares falling 27% this year after chairman Atanu Chakraborty resigned in March citing 'personal values and ethics'. Bharucha, not due to retire until 2029, is eligible under RBI rules, while the bank also seeks an external candidate per central bank norms.”
