Rare but not unusual for RBI to come out in support of a troubled bank

RBI's swift support for HDFC Bank after chairman's exit aims to calm depositor and investor sentiment, reflecting a rare but not unprecedented regulatory intervention

The Reserve Bank of India’s (RBI’s) decision to come out quickly and strongly in support of HDFC Bank on Thursday in the wake of sudden resignation of its part-time Chairman Atanu Chakraborty on late Wednesday evening, was aimed at calming depositors and investors’ nerves. Such a move by the central bank is rare but not unusual.

 

Typically, the RBI does not talk about any individual organisation that it regulates.

 

HDFC Bank — officially known as Domestic Systemically Important Bank (D-SIB) — is “too big to fail”. D-SIBs are subjected to greater scrutiny and higher capital requirements.

 

Only two other banks in India – country’s largest lender State Bank of India (SBI) and second-largest private sector lender ICICI Bank — are D-SIBs.

 

HDFC Bank – the largest private sector bank in the country – has a deposit base over ₹27.5 trillion and loan book of over ₹28.6 trillion. It had 100 million customers at the end of December 2025.

 

Commenting that it has taken note of the recent developments in HDFC Bank, the RBI said: “HDFC Bank is a D-SIB with sound financials, professionally run board, and competent management team.”

 

Recently, when another private sector lender – IDFC First Bank – was hit by a fraud in one of its branches in Chandigarh, RBI Governor Sanjay Malhotra had said there was no systemic issue with the bank. He said this while responding to a query from the media in New Delhi.

 

Way back in 2008, when rumours surfaced about trouble in ICICI Bank, the RBI came out with a statement saying the bank has sufficient liquidity and will be able to meet requirement of the depositors. Following the clarification, rumours evaporated, and the share price recovered.

 

Similarly in 2020, when Yes Bank was facing trouble, the central bank came out with a statement saying depositors’ money is safe and the bank is being closely monitored. Yes Bank put in place a new board and chief executive officer (CEO), which took the bank out of trouble.

 

In the last 25 years at least, it was ensured by the regulator that no depositor of any commercial bank lost their hard-earned savings.