RBI sees no governance concerns at HDFC Bank despite chairman’s exit

The Reserve Bank of India (RBI) has found no governance or conduct-related issues at HDFC Bank, Governor Sanjay Malhotra said on Wednesday, following the sudden resignation of the bank’s chairman.

Addressing questions at the post-monetary policy press conference, Malhotra responded to concerns triggered by Atanu Chakraborty’s exit on March 18 and the subsequent dip in HDFC Bank’s share price. The Governor clarified that the RBI had reviewed the minutes of the bank’s board meetings and found nothing of material concern .

The RBI had earlier highlighted in its March 19 press release that there were no significant issues regarding the bank’s governance or conduct . “ HDFC Bank is a Domestic Systemically Important Bank (D-SIB) with sound financials, a professionally run board, and a competent management team. Based on our periodic assessments, there are no material concerns on record,” the press release stated.

Malhotra also reassured the public on the overall strength of India’s banking system , describing it as “ very resilient, safe, and strong .” He emphasized that there are no systemic risks threatening the profitability or health of banks, despite global uncertainties arising from the West Asia conflict .

On broader monetary policy, the Governor hinted that the low interest rate regime could continue for some time , and cautioned that measures recently adopted by the RBI to stabilize the rupee are temporary and will not remain indefinitely.

The RBI’s statement comes at a critical time when investor sentiment was rattled by sudden leadership changes, yet Malhotra’s comments aim to restore confidence in India’s banking sector.