Their comments come after the bank’s board concluded its internal review into the Maharashtra State Road Development Corporation (MSRDC) deposit arrangement, and concluded that the issue reflected business overreach rather than mala fide conduct. The board found no evidence of personal misconduct or improper intent, but issued warning letters and imposed monetary penalties of ₹1 lakh each on the bank’s Managing Director and CEO Sashidhar Jagdishan, Chief Financial Officer Srinivasan Vaidyanathan, and Group Head of Retail Assets Arvind Vohra.
The experts believe the latest episode should not be viewed in isolation, as investors will judge whether the bank has learned from a series of governance-related issues and strengthened its oversight.
Tandon said investors are now looking beyond the outcome of individual cases. “In governance means are just as important as the ends, and the processes are just as important as the outcomes,” he said. “It’s not enough to conclude… that there is no financial impact or the matters have been resolved.”
Former HDFC Bank independent director Atanu Chakraborty resigned from the bank in March 2026, citing concerns over certain practices that he said were inconsistent with his values and ethics.
Tandon said recent events, including Atanu Chakraborty’s resignation, the MSRDC deposit issue and other governance concerns, should be viewed together rather than separately. According to him, the bank now needs to reassure investors that governance processes, board oversight and internal controls are becoming stronger.
Parekh said the board’s independent review provides clarity on the nature of the issue. He noted that it was found to be “more of a governance or a market outreach issue rather than a compliance or a… breach issue,” giving the board a basis for recommending the CEO’s reappointment to the Reserve Bank of India. However, he declined to speculate on how the RBI would assess that recommendation.
Parekh also described the penalties imposed on the CEO, CFO and other executives as unprecedented for a sitting management team. He said the action should be seen as “some kind of a signal that the board has sent out,” underlining that governance standards remain important even where there is no finding of personal misconduct.On whether the penalties were sufficient, Tandon said there was no evidence of malafide intent or personal gain. Instead, he believes the focus should now shift to ensuring stronger governance going forward rather than debating the size of the punishment.
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Both experts agreed that HDFC Bank remains one of India’s strongest banking franchises with a resilient business model. But they said restoring long-term investor confidence will require greater transparency, stronger board oversight and consistent governance practices. As Tandon put it, “the bank has to build back its long-term credibility, which is very quickly lost.”
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