HDFC Bank MD and CEO Sashidhar Jagdishan to step down in October

NEW DELHI: HDFC Bank managing director and chief executive Sashidhar Jagdishan has decided not to seek reappointment when his current term ends on October 26, the country's largest private sector lender said in a regulatory filing on Saturday.

Jagdishan conveyed his decision to the bank's board and reiterated it despite the board's "persuasion", the filing said. The HDFC Bank board will fast-track the process to select and appoint his successor "well within time", it added.

The board "deeply appreciated his commitment, leadership, contribution to the growth and stability of the Bank and his role in successful completion of one of the largest mergers in corporate India," the filing said. The bank also wished Jagdishan well in his future endeavours.

Jagdishan's decision comes amid heightened scrutiny of governance practices at HDFC Bank. His reappointment had been the subject of speculation, particularly after non-executive chairman Atanu Chakraborty's surprise resignation in March, when he cited concerns over ethics and governance practices at the bank.

Jagdishan was among three senior executives fined in July following an internal review of its arrangement with the Maharashtra State Road Development Corporation (MSRDC). The bank imposed a penalty of Rs 1 lakh each on Jagdishan, chief financial officer Srinivasan Vaidyanathan and group head for retail assets Arvind Vohra. Several other incidents reported in recent months have also raised questions over governance practices at the bank.

Meanwhile, HDFC Bank's shares have underperformed in recent months, with investors raising concerns over its net interest margins, more than two years after its merger with mortgage lender parent HDFC. Jagdishan, 61, will retire from HDFC Bank on October 26 after nearly three decades with the lender.