HDFC Bank's Managing Director and CEO, Sashidhar Jagdishan, has voiced his strong support for interim chairman Keki Mistry to assume the role permanently. Jagdishan's endorsement comes as the country's second-largest lender navigates a period of internal review following the unexpected departure of its previous part-time chairman.
Mistry's Potential Permanent Appointment
Speaking to reporters on Saturday, Jagdishan stated, "We are all rooting for Mistry for the post." He acknowledged that while the sentiment among the leadership is clear, the formal process, including deliberations by the Nomination and Remuneration Committee (NRC) and the board, must conclude before a recommendation can be forwarded to the regulator. Keki Mistry, a seasoned banker and former vice-chairman of HDFC before its merger with HDFC Bank, was appointed interim chairman in March.
Legal Review and Former Chairman's Exit
Mistry's interim appointment followed the abrupt resignation of part-time chairman Atanu Chakraborty, who cited "happenings and practices" within HDFC Bank that were not congruent with his personal values and ethics. This resignation prompted a legal review by external law firms, which is currently underway. "The volume of data that the council has to go through is rather voluminous, and that's why probably it's taking time," Jagdishan explained, assuring that the bank would disclose a summary once the review is complete.
Addressing Mis-selling Allegations and Internal Controls
The bank also faced scrutiny over allegations of mis-selling AT1 bonds of Credit Suisse to clients at its Dubai International Financial Centre branch. These allegations led to the dismissal of three senior officials shortly after Chakraborty's resignation. Jagdishan emphasized the robust guardrails the bank has in place for selling third-party products, including pre-verification and video confirmations to ensure customer understanding and prevent coerced sales. He also highlighted clear exclusions for marginal segments and senior citizens beyond a certain age.
"Of course, we are not perfect because we deal with about 215,000 people across 9,689 branches in the country in 4,000 towns," Jagdishan admitted, acknowledging that "some amount of exuberance" might occur, but any instances of mis-selling are addressed swiftly and sternly.
Leadership Tenure and Financial Performance
In related news, Deputy Managing Director Kaizad Bharucha confirmed that Jagdishan's own tenure as MD and CEO, which is up for renewal later this year, is "seized up" by the board and will be addressed in due course. Amidst these developments, HDFC Bank reported a 9 percent year-on-year increase in its January-March quarter net profit, reaching Rs 19,221 crore, with net interest income growing 3.2 percent to Rs 33,082 crore.