HDFC Bank CEO Sashidhar Jagdishan steps down: How the lender fared under his leadership
HDFC Bank’s managing director and chief executive, Sashidhar Jagdishan, on Saturday decided to step down as his current term ends on October 26, and is not considered for reappointment.
Jagdishan, 61, spent nearly three decades at the bank. After taking over as the bank CEO in October 2020, Jagdishan is serving his second three-year term as the lender’s head.
The bank said he conveyed his decision not to seek reappointment despite the board’s persuasion.
“The board deeply appreciated his commitment, leadership, contribution to the growth and stability of the Bank and his role in the successful completion of one of the largest mergers in corporate India,” the regulatory filing said.
It also conveyed best wishes to Jagdishan in his future endeavours.
Here’s a look at how the bank performed under his leadership:
Jagdishan took charge as HDFC Bank’s MD & CEO on October 27, 2020, succeeding Aditya Puri.
Within months, the lender announced the merger of its major parent, HDFC, with itself, leading to significant expansion of the asset book and concerns over business performance, HDFC liability payouts, and compressed net interest margins of the combined entity.
The management, however, pointed out that the merger will yield long-term benefits.
According to a report published by HDFC Bank, during his tenure, the lender delivered strong profit growth, though the growth was moderate in recent years. In FY21, HDFC Bank’s net profit touched 18.5% to ₹31,116.5 crore, and the net interest income grew 15.5% to ₹64,879.6 crore.
By FY24, profit after tax grew to ₹60,812.3 crore, up 37.9% on a standalone post-merger basis, as the bank also gained market share in deposits and advances.
And for FY26, HDFC Bank’s reported profit stood at ₹74,670 crore, with ROA at 1.8% and ROE at 14%. It expects profit to rise to ₹84,230 crore in FY27, with ROE improving to 14.1%
Controversies, regulatory action and a costly technology embargo
However, Jagdishan’s tenure was marred by several controversies. In late July, the bank’s board found some irregularities in its deposit arrangements with the Maharashtra State Road Development Corporation (MSRDC). Following this, the bank also slapped a fine of ₹1 lakh each on Jagdishan and other key executives. Although it said there was no bad intention behind their actions.
The issue was that the bank allegedly paid MSRDC more than the standard interest rate, or “card rate”, to attract large deposits from the state-run agency. These extra payments were reportedly shown in the bank’s books as marketing expenses.
During his tenure, Jagdishan had also faced allegations of graft in the Lilavati Hospitals matter, which was eventually dismissed by the Bombay High Court.
The RBI imposed an ’embargo’ on HDFC Bank in December 2020, prohibiting the bank from issuing new credit cards and launching new digital initiatives due to recurring technology outages. The management under Jagdishan ensured that the embargo was completely lifted in 15 months.
