And, he hardly spoke.
Wednesday’s abrupt resignation of Chakraborty might have come as a bolt from the blue for the financial markets. Yet, those observing the institution from relative proximity were seemingly preparing for the ostensible calm on the surface to be shattered by a volcanic eruption.
On a fine Wednesday afternoon around 2.30 pm when some top executives of the HDFC Group were just coming out of discussions with the regulator following a customary meeting, the bank’s board members received a notification for a meeting without details of the agenda, said a person familiar with the development. “None of us as board members are aware of what are the specific issues which Mr Chakrabarty wrote in his letter. The board members asked him yesterday and he did not give any specific explanation,” Keki Mistry, who has taken interim charge as chairman, said during the analyst call on Thursday morning before the markets opened for trading.
Bank insiders said Chakraborty’s involvement extended to strategic decisions and senior management promotions, further irking the leadership team.
“Chakraborty was increasingly seen as intervening in the day-to-day affairs and operations of the bank, which did not go down well with the senior leadership. The friction is understood to have intensified around the MUFG-HDB Financial Services discussions,” a person familiar with the matter said.Mitsubishi UFJ Group (MUFG) had sought to buy a stake in HDB Financial, the HDFC Bank subsidiary, valuing the business around $10 billion. The deal did not fructify, and the bank instead sought to list the non-bank lending arm to meet compliance requirements.
The Japanese financial powerhouse then went on to buy a sizable stake in Shriram Finance late last year, the deal marking the biggest foreign direct investment in Indian capital markets history.
Some of the board members sought to know the details from Chakraborty on the ‘ethics and values’ he mentioned in his resignation letter, but he declined to specify, said another person aware of it.
“Over the past so many years he was part of many committees, but did not raise specific issues,” said another person.
Mistry added that in no board meeting, a total divergence of opinion was noticed with respect to the past chairman. And the board minutes would reflect that, he said.
Chakraborty did not respond to requests for an interview.
Over the years, Chief Executive Sashidhar Jagdishan and Chairman Chakraborty, have seen their engagement being minimal, unlike instances where the two positions interact well.
Over two decades, Sashi has been among key members who was a bridge between the management and the chairman and the process was smooth, said a person familiar. It is surprising that it broke down, he said.
“While not referring to any specific bank, there was a media report in December 2025 indicating that a bank’s chairperson was getting involved in day-to-day affairs, which regulators were uncomfortable with, as the role is meant to be non-executive and focused on oversight,” said Rohan Mandora, analyst Equirus Securities. “While the exact reasons are not known, possible areas of divergence could include alignment between the board and management on CEO succession, the bank’s post-merger strategy, or other external developments.”
Just like molten rock remains uncomfortably mobile long before a volcanic eruption, the differences between the management and the chairman have been bubbling beneath the surface for years.
The most publicised dispute in the history of Indian finance has been the merger between HDFC and HDFC Bank. While it did not happen until the founding managing director of the bank, Aditya Puri, ended his tenure, the wheels were set in motion soon after he retired in October 2020.
Chakraborty as a member of the board was a key person in shepherding the merger at the bank, which it was resisting for years as the financial metrics could go adverse.
Beyond that, too, the management and the chairman were not on the same page on many issues leading to a relatively cold relationship.
“The chairman or the director can call for anything, but some of the things were too intrusive,” said a banker who preferred anonymity. “It came to such a situation that the management felt that it was getting crippled because of the interference.”
The industry may be well aware of the rumblings inside the bank, but even the regulator was informed about the non-executive chairman taking decisions. There was speculation that the regulator had, in its light-touch way, signalled that he should not interfere with executive decision-making at the lender.
That the RBI stepped in to put to rest any speculation that was triggered by Chakraborty’s charges on ‘values and ethics’ at the bank indicates that the chairman was on one side, and that the management and the regulator were on the other.
