In spotlight over governance, HDFC Bank CEO Sashidhar Jagdishan to step down

Sashidhar Jagdishan will step down as Managing Director and CEO of HDFC Bank, the country’s largest private sector lender in October, bringing to an end a six-year tenure that included the institution’s transformational merger with mortgage giant HDFC Ltd.

The decision comes at a critical juncture for HDFC Bank, which is now preparing for a leadership transition even as questions around corporate governance and internal practices have come under scrutiny in recent months. Jagdishan has decided not to seek reappointment as MD and CEO, HDFC Bank said in a regulatory filing on Saturday.

His current term ends on October 26, 2026, after which he will retire from the services of the bank. “The Board took note of Sashidhar Jagdishan’s communication to not seek reappointment. Despite persuasion, Jagdishan reiterated his decision to not seek reappointment,” the bank said.

“The Board decided to fast-track the process for selection and appointment of his successor well within time,” it said. The development marks the end of a leadership chapter that began in October 2020, when the Reserve Bank of India approved Jagdishan’s appointment to succeed Aditya Puri as MD and CEO.

Jagdishan has been with HDFC Bank since 1996. He joined as a manager in the finance function, became the Chief Financial Officer in 2008 and played a key role in the bank’s financial and strategic functions. What put the spotlight on the bank in March this year was the abrupt resignation of part-time chairman Atanu Chakraborty, who said certain happenings and “practices” within the bank were not in line with his “personal values and ethics”.

The bank subsequently appointed external law firms to examine the concerns raised in his resignation letter. The law firms submitted a report giving clean chit to the bank. The RBI too had given a clean chit to the bank saying it did not find any governance concerns.

On May 27, The Indian Express reported that HDFC Bank’s Audit Committee had ordered an internal vigilance investigation into payments totalling Rs 45 crore made to the Maharashtra State Road Development Corporation’s deposits during FY2024 and FY2025.

The payments were allegedly routed through the bank’s marketing department and presented as contributions to a road-safety campaign rather than as differential interest on deposits. The bank had denied the allegations relating to the reported payments.

But in July, the bank’s board concluded an internal disciplinary process relating to the MSRDC arrangement and issued warning letters and imposed a monetary penalty of Rs 1 lakh each on Jagdishan, Chief Financial Officer Srinivasan Vaidyanathan and Group Head of Retail Assets Arvind Vohra.

The board characterised the conduct as “business overreach” rather than mala fide action, personal enrichment or improper motive, and decided that the matter should be communicated to the RBI. Earlier in March this year, the bank had taken action against three executives, including Sampath Kumar, group head of branch banking, for their alleged involvement in mis-selling of Credit Suisse Additional Tier-1 bonds.

The bank’s executives were accused of inflating income details of NRI clients to qualify them for AT-1 bond purchases, a product typically reserved for high-net-worth investors. The bank had in September 2025 informed the stock exchanges about an action taken by the Dubai Financial Services Authority (DFSA) barring its Dubai International Financial Centre (DIFC) branch from onboarding new clients.

Jagdishan’s departure puts the spotlight on HDFC Bank’s succession process. The bank had already appointed former Chief Election Commissioner Rajiv Kumar as chairman in June. The choice of the next CEO will therefore be closely watched by investors and regulators, particularly because HDFC Bank is still in the process of integrating the enormous HDFC Ltd franchise and recalibrating its balance sheet following the merger.

Now, with less than two months left in his tenure, the bank faces the task of finding a successor capable of taking the merged institution into its next phase — while restoring absolute confidence in its governance and internal controls.

The biggest test of Jagdishan’s leadership was the merger of HDFC Ltd with HDFC Bank, which became effective on July 1, 2023. The $40-billion all-stock transaction was described as one of the biggest deals in Indian corporate history.

The merger brought India’s largest housing finance company into the country’s largest private sector bank, creating a financial services institution with a combined asset base of more than Rs 18 lakh crore. Jagdishan had argued that the enlarged balance sheet would allow the bank to participate more meaningfully in financing India’s infrastructure and economic growth.

He also saw the mortgage business as a major opportunity, pointing out that only a small proportion of HDFC Bank’s customers were sourcing their home loans through the bank. The bank had a market capitalisation of Rs 11.10 lakh crore as of August 28, 2026.

George Mathew is an Associate Editor with The Indian Express, based in Mumbai. A veteran of financial journalism with nearly three decades of experience, he is one of the country’s most authoritative voices on banking, regulation, and the corporate sector.

Expertise & Focus Areas Mathew’s reporting covers the nerve center of India’s economy. His specialized beats include: The Reserve Bank of India (RBI): He has tracked the central bank's policy evolution through the tenures of multiple Governors, offering deep insights into monetary policy, repo rates, and banking regulation.

Banking & Insurance: Extensive coverage of public and private sector banks, non-performing assets (NPAs), and key legislative reforms like the Insurance Amendment Bills. Corporate Affairs: Mathew frequently breaks major stories related to India's largest conglomerates, with a specific focus on the Tata Group, documenting boardroom shifts and strategic decisions.

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