IiAS Says Coming Months Will Be Defining for HDFC Bank

The coming months will be crucial for HDFC Bank as it seeks to rebuild investor confidence and address concerns over corporate governance, according to proxy advisory firm Institutional Investor Advisory Services (IiAS).

The bank’s Managing Director and CEO, Sashidhar Jagdishan, announced on August 29 that he would not seek reappointment for a third consecutive term after his second term ends on October 26, 2026. The Board is expected to accelerate the process of identifying and recommending a successor to the Reserve Bank of India (RBI).

IiAS said the leadership transition comes at a defining stage for the bank, which has faced questions over governance, succession planning, expansion, margins and the financial impact of its merger with HDFC in July 2023. Shareholders also sought clarity on the exit of former part-time chairman Atanu Chakraborty. Independent legal reviews found no evidence supporting the concerns he had raised.

Deputy managing director Kaizad Bharucha is seen as a potential internal successor. External names reportedly being considered include Anup Bagchi, K. Balasubramanian, Rajiv Sabharwal and Vibha Padalkar.

The new leadership will also need to address the merger-related challenges, including a credit-to-deposit ratio of nearly 96% and a CASA ratio of 32%, compared with about 48% before the merger. While the bank’s long-term outlook remains positive, rebuilding its governance credibility and deposit base will be key priorities.