HDFC Bank’s recommendation to reappoint Managing Director and CEO Sashidhar Jagdishan has been delayed while the bank’s independent directors conduct an additional governance review before sending his name to the Reserve Bank of India (RBI). According to Reuters and other reports, the review is ongoing, and no wrongdoing has been established so far.

Key points

• Jagdishan’s current term as CEO ends in October 2026.
• Under RBI rules, banks generally submit CEO reappointment proposals several months before the term expires.
• The board is carrying out an additional review after recent governance-related issues, including the resignation of former chairman Atanu Chakraborty earlier this year.
• The current review is reportedly examining allegations that the bank offered preferential rates on certain large deposits, potentially breaching RBI regulations. Sources indicate that no evidence of wrongdoing has been found at this stage.
• The board is expected to take a final decision after the review concludes, likely in early August.

Market impact

The uncertainty surrounding the bank’s top management has weighed on investor sentiment. Reports note that HDFC Bank shares have underperformed the Nifty Bank index since the governance issues surfaced earlier this year.

What investors should watch

• The board’s final recommendation on Jagdishan’s reappointment.
• RBI’s approval after the recommendation is submitted.
• Any official disclosure from HDFC Bank regarding the outcome of the governance review.