Dubai regulatory action, MSRDC fees and Jagdishan-Chakraborty differences: What HDFC Bank’s internal probe examines
HDFC Bank has initiated a probe into suspected leaks of confidential information to social media and outsiders, as the country’s largest private sector lender seeks to strengthen governance amid a series of controversies, people familiar with the matter said.
The review includes scrutiny of email communications involving some senior management personnel as the bank looks to reinforce internal controls and restore confidence in its governance practices, the people said.
What issues are at the forefront?
Among the matters under examination are suspected leaks of internal information relating to regulatory action against the bank’s Dubai operations, fee payments linked to the Maharashtra State Road Development Corporation (MSRDC), disagreements involving senior executives, and differences between outgoing CEO Sashidhar Jagdishan and former chairman Atanu Chakraborty.
The probe aims to establish how sensitive internal records “found their way into the public domain” and whether employees breached confidentiality obligations or the bank’s code of conduct, the people said.
The review is also intended to “reinforce accountability” and ensure that incoming leadership begins its tenure with stronger internal governance controls, they added.
What did HDFC say?
Acknowledging an internal review on the matter, a spokesperson of HDFC Bank said, “The bank is committed to upholding the highest standards of ethics and governance as outlined in our Code of Conduct. We take any report of potential violations seriously.”
In line with the bank’s policies, the spokesperson said, an internal review into this matter is currently underway to gather and evaluate all relevant facts.
“To protect the integrity of the process and the privacy of all parties involved, we do not comment on active internal reviews. Appropriate action will be taken based on the findings, once the review is complete,” the spokesperson added.
The review comes at a sensitive moment for HDFC Bank, which has spent three decades cultivating a reputation for conservative management, strong internal controls and consistent profitability. Currently, the lender is preparing for its first outsider chief executive following boardroom disputes and management departures.
In recent months, internal divisions in HDFC have played out publicly. In March, then-chairman Atanu Chakraborty resigned abruptly, citing differences between his personal values and certain practices at the bank.
Bagchi’s appointment follows the surprise decision of Sashidhar Jagdishan, the incumbent chief executive, not to seek another term. Jagdishan is stepping down after six years at the helm.
Kaizad Bharucha, deputy managing director and one of the bank’s longest-serving executives, has also asked to leave at the end of December.
Its share price has declined about 28% this year.
