Atanu Chakraborty's exit stems from power struggle with HDFC CEO: Report

HDFC Bank chairman Atanu Chakraborty resigned following disagreements with CEO Sashidhar Jagdishan, with sources citing a power struggle and differing views on leadership

The resignation of Atanu Chakraborty as chairman of HDFC Bank was due to a power struggle with Chief Executive Officer (CEO) Sashidhar Jagdishan, the Financial Times reported.

 

Chakraborty, who had been non-executive chairman since 2021, stepped down last week. In his resignation letter, he cited “ethical differences” with the bank.

 

However, sources quoted by the report said the issue went beyond compliance concerns and reflected a broader clash over leadership style, strategy and decision-making.

 

Tensions over CEO reappointment

 

A key flashpoint was the renewal of Jagdishan’s tenure as CEO, which requires regulatory approval. The news report quoted sources as saying that Chakraborty was not in favour of extending his term, while most board members supported the renewal.

 

 

A senior banking industry executive said the chairman had reservations about continuing with the current leadership. Another person familiar with board discussions noted that disagreements over the CEO’s reappointment were central to the fallout, the news report said.   

 

Differences on strategy, key decisions

 

The friction between Chakraborty and Jagdishan reportedly dates back to earlier strategic decisions, including plans related to subsidiary HDB Financial Services. Jagdishan supported selling a minority stake in the business to Mitsubishi UFJ Financial Group in 2024. Chakraborty, however, opposed the move. The proposal did not go through, and the company was eventually listed instead, the news report said.

 

The news report quoted a shareholder saying that disagreements within the leadership had been building for some time, rather than being triggered by a single event. 

 

Contrasting leadership styles

 

The two leaders also differed sharply in their working styles. Chakraborty, a former senior finance ministry official, was seen as assertive and hands-on in his role as chairman. Jagdishan, in contrast, rose through the ranks within HDFC and is viewed as more low-profile in his approach.

 

Some stakeholders noted that Jagdishan did not initially command the same authority as his predecessor Aditya Puri, who led the bank for over two decades, the news report said.

 

One shareholder said Jagdishan’s leadership style was more understated, which took time for senior executives to adjust to.

 

Concerns over governance approach

 

Chakraborty’s active involvement in day-to-day matters also became a point of friction. The news report quoted sources as saying he engaged closely in decisions such as promotions and staff interactions -- something unusual for a non-executive chairman.

 

Some insiders felt Chakraborty’s approach created discomfort within the management team, which was used to greater autonomy, the news report said. Others, however, saw his actions as part of a more proactive oversight role.   

 

Regulatory concerns and recent issues

 

Sources, as quoted by the news report, said Chakraborty had also raised concerns about compliance and internal accountability at the bank. HDFC Bank has faced some regulatory scrutiny in recent years. These included penalties related to know-your-customer norms and action by Dubai’s regulator over procedural lapses linked to the sale of Credit Suisse AT1 bonds.

 

Earlier this month, the bank said it had taken action against employees involved in the issue.

 

Bank moves to reassure investors

 

Following Chakraborty's resignation, the Reserve Bank of India (RBI) approved veteran board member Keki Mistry as interim chairman. The bank has also appointed external legal firms to review the circumstances around the resignation.

 

Despite these steps, management faced tough questions from investors and analysts in a recent call, where it struggled to clearly explain the sudden departure.

 

Mistry said that differences at the board level do arise occasionally but insisted there was nothing significant to worry about.