At the top of HDFC Bank: How compliance lapses and internal tensions unfolded.
Dubai: The sudden resignation of Atanu Chakraborty as chairman of HDFC Bank twelve days ago came after a series of events involving the bank’s Dubai operations, internal disciplinary measures, and disagreements over how those matters were managed.
Dubai Curbs, Bond Scrutiny
The episode began with regulatory action in Dubai. In September 2025, the Dubai Financial Services Authority (DFSA) flagged compliance lapses at the DIFC branch of HDFC Bank.
The bank was subsequently restricted from onboarding new clients and from performing certain financial services related to investment advisory, transaction arrangements, and custody.
The restrictions stemmed from concerns over how services were provided to clients who had not completed the required onboarding procedures.
AT1 Bonds and Internal Disputes
Around the same time, focus shifted to the sale of additional tier 1 (AT1) bonds issued by Credit Suisse. These high-yield instruments were later written down following the Swiss bank’s 2023 rescue, resulting in losses for high-net-worth investors.
Internal Action and Ethical Rift
An internal review was launched at HDFC Bank. Several employees were placed on gardening leave, while others faced disciplinary measures, including terminations. The period also saw the exit of multiple senior executives, including key figures in compliance and internal audit.
In an interview with CNBC TV-18, Chakraborty said that action on the bond-related issues had been delayed, noting it “was not immediate” and took time to materialise. He also highlighted that the issue had initially been viewed internally as a “technical lapse.”
Chakraborty’s disagreement with that interpretation was central to his decision to resign. He stated that it did not align with his standards, adding, “these practices are not rooted in values,” and pointing to an “incongruence” between his framework and the bank’s approach.
He underlined that his decision to step down reflected broader considerations, not a specific matter.
Market Reaction and Current Stance
The resignation on March 18 triggered a sharp market reaction, with HDFC Bank losing roughly $21 billion in market value and drawing renewed scrutiny on governance and boardroom dynamics.
The bank, under CEO Sashidhar Jagdishan, has maintained that its governance practices remain robust and that its strategic priorities are unchanged. The Reserve Bank of India also confirmed that the lender remains well-capitalised and operationally strong.
Limited Comment and Broader Implications
Chakraborty declined to provide further details on his resignation, stating, “my letter is self-explanatory.”
The sequence of events has highlighted how regulatory findings, internal actions, and board-level differences developed in parallel, ultimately contributing to his decision to step down.
