According to two sources familiar with the situation, HDFC Bank is likely to appoint Kaizad Barchuha, Deputy Managing Director, as one of two potential candidates for the next CEO following the retirement of current head Sashidhar Jagdishan at the end of his second term in October.
India's largest private lender is also seeking an external candidate, which complies with the central bank's rule requiring banks to present multiple names for the CEO position. The information about the search was confidential, and the sources declined to disclose their identities.
The search for a new CEO began after approximately six months of turmoil at HDFC Bank, when leadership issues negatively impacted the bank's shares. The bank announced Jagdishan's departure on Saturday. Previously, it was widely predicted that he would continue as CEO before Atanu Chakraborty resigned as chairman in March, stating that the practices at the bank contradicted his 'personal values and ethics.'
An independent legal review found no evidence supporting Chakraborty's concerns regarding governance. Furthermore, last month, the board of directors fined Jagdishan and three others over a separate issue related to large deposit pricing.
The bank stated on Saturday, without going into detail, that its CEO, who has been in the role since October 2020, decided not to seek reappointment and that the bank will expedite the succession process.
Barchuha, a long-serving executive overseeing retail and wholesale business, is named among the leading internal contenders. Barchuha does not plan to retire until 2029, when he will have served as a full-time director for 15 years, making him compliant with RBI requirements for the CEO position. The maximum tenure for such a director is 15 years, although there are possibilities for exceptions.
The share price of HDFC Bank, which foreign investors held approximately 40 percent of by the end of June, has dropped by 27 percent this year, with the decline accelerating after Chakraborty's departure. Investors have also expressed concern over the lack of capital appreciation following the 2023 merger, which Jagdishan oversaw with its parent company HDFC Ltd.
