MUMBAI – Rajiv Kumar, the newly appointed part-time chairman of HDFC Bank, declared at the bank's 32nd annual general meeting on Wednesday that there are no governance-related concerns at a systemic level within the institution. His statement comes amidst heightened scrutiny following the resignation of former chairman Atanu Chakraborty earlier this year.
Kumar, whose appointment was approved by the Reserve Bank of India (RBI) on July 15, emphasized the board's unwavering commitment to the highest standards of corporate governance. He highlighted a focus on integrity, transparency, accountability, and prudent stewardship, assuring shareholders of robust control systems and oversight at all committee levels. The chairman reiterated that HDFC Bank remains "fundamentally strong with a pristine balance sheet."
Addressing the shareholders, Kumar acknowledged that large institutions might encounter isolated issues occasionally. He stressed the importance of addressing such matters promptly and transparently, affirming a zero-tolerance policy towards any unethical practices, which would be handled firmly on a case-by-case basis.
Context of Governance Review
The chairman's remarks provide reassurance after a period of uncertainty triggered by Atanu Chakraborty's resignation in March. Chakraborty cited "certain happenings and practices within the bank" that conflicted with his personal values and ethics. He later publicly mentioned a disagreement over the alleged mis-selling of Credit Suisse's perpetual bonds.
In response to Chakraborty's departure, HDFC Bank promptly initiated an independent legal review, commissioning external law firms to investigate the concerns raised. This comprehensive review spanned two years prior to Chakraborty's resignation, examining board and committee meeting documents, conducting interviews with independent directors and senior executives, and analyzing thousands of documents.
The bank announced in June that the three-month review found no evidence to substantiate Chakraborty's governance concerns. The findings indicated a lack of contemporaneous support for his statements within board materials or internal communications. Following Chakraborty's exit, Keki Mistry served as interim chairman with RBI clearance until Kumar assumed the role in July.