HDFC Bank CEO Jagdishan to step down, board begins succession process

Mumbai: HDFC Bank, India's largest private sector lender, on Tuesday announced that its Managing Director and Chief Executive Officer, Sashidhar Jagdishan, has decided not to seek reappointment. He will retire from the services of the bank at the close of business hours on October 26, 2026, according to an exchange filing.

The bank's board said it took note of Mr. Jagdishan's communication and, despite attempts to persuade him, he reiterated his decision. The board expressed deep appreciation for his commitment, leadership, and contribution to the bank's growth and stability, including his role in the successful completion of one of the largest mergers in corporate India. The board also conveyed its best wishes for his future endeavours.

The board has decided to fast-track the process for selecting and appointing his successor well within the timeline, ensuring a smooth transition. Mr. Jagdishan, who took over after the retirement of Aditya Puri in 2020, has been with HDFC Bank since 1996. He started as a manager in the finance department, became Business Head – Finance in 1999, and was appointed Chief Financial Officer in 2008. Prior to HDFC Bank, he worked with Deutsche Bank AG in Mumbai for three years.

His tenure saw the landmark merger of HDFC Ltd with HDFC Bank in 2023, a complex consolidation that also weighed on the bank's financial performance due to the high cost of funds from the mortgage lender. The merger remained a drag on the bank's results for several quarters, which contributed to criticism of the management.

In recent months, Mr. Jagdishan faced scrutiny over the bank's stock underperformance and allegations of corporate governance lapses, which the bank denied. Earlier this year, the bank's part-time chairman, Atanu Chakraborty, resigned citing ethical grounds, adding to the pressure on the leadership.

The bank also conducted an internal review into its deposit arrangements with the Maharashtra State Road Development Corporation (MSRDC) in 2017 and 2021. The Special Disciplinary Committee of Independent Directors concluded that the conduct of Mr. Jagdishan, the bank's CFO, and another senior official constituted 'business overreach' rather than any mala fide action, personal enrichment, or improper motive. Consequently, the three were fined by the bank. The matter was communicated to the Reserve Bank of India (RBI).

According to sources familiar with the development, the RBI was believed to have expressed discomfort with Mr. Jagdishan's continuation at the top post. With less than two months left for the completion of his current tenure and no clear signal from the board or the regulator regarding reappointment, Mr. Jagdishan preferred to opt out, sources indicated. The bank has not confirmed these reports.

Earlier this week, a few U.S. law firms initiated a class action suit related to the MSRDC case, adding to the legal overhang for the bank. The bank has not yet commented on the suit.

Mr. Jagdishan's retirement marks the end of a notable career at HDFC Bank, where he played a critical role in its growth over nearly three decades. His successor will inherit a bank that remains a dominant player in the Indian banking sector but faces challenges of investor confidence and regulatory expectations.