No internal power struggle, no material issues, and governance and ethics come above everything else. 

These frantic statements were made Thursday by the senior management at HDFC Bank to reassure investors and stakeholders, a day after the abrupt resignation of part-time chairman Atanu Chakraborty which shook the country’s largest private sector lender and sent its stock prices diving.

Keki Mistry, interim chairman of HDFC Bank, assured that there were no operational concerns or governance lapses. He reiterated that differences do arise but are not material. 

“The board’s oversight mechanism remains fully operational, and our collective commitment to protecting the interests of the institution, depositors, shareholders and all stakeholders is completely and totally unwavering,” he said, during a call with analysts.

Mistry said despite requests from board members, Chakraborty did not specify any concerns that led him to resign 14 months before the end of his second term as chairman.

Earlier, Chakraborty had written a resignation letter to the board citing “certain happenings and practices within the bank” that were “not in congruence” with his personal values and ethics. 

Mistry, a veteran at the mortgage lender HDFC Ltd, the erstwhile parent of HDFC Bank, led the challenge on Thursday to help rebuild trust in the lender after the merger of the two entities in July 2023.

“Believe me, at the age of 71, I would not have taken on this responsibility if the bank’s systems, processes and governance practices were not aligned with my values,” Mistry said.

On Wednesday evening, the Reserve Bank of India (RBI) had approved Mistry’s appointment as interim chairman of HDFC Bank for three months.

HDFC Bank’s stock fell 5.13% to close at Rs 799 per share, after having plunged to Rs 770 apiece early morning.

Meanwhile, the government expressed confidence on the bank’s fundamentals. "HDFC Bank is a strong institution with strong fundamentals," Financial services Secretary M Nagaraju said.

The RBI also said there were no material concerns on record as regards the bank's conduct or governance. 

"HDFC Bank is a domestic systemically important bank (D-SIB) with sound financials, professionally run board and competent management team. Basis our periodical assessment, there are no material concerns on record as regards its conduct or governance," the regulator said in a statement.

HDFC Bank managing director and CEO Sashidhar Jagdishan’s second term expires in October.

Regarding the reappointment, Mistry said it is something that will be considered by the nomination and remuneration committee. “At the appropriate time, the committee will meet and take it up at the board. He has been running the bank successfully for the last many years,” he said.

Kaizad Bharucha, the bank’s deputy managing director, is set to get a larger role as the lender seeks to re-examine its organisational structure.

“He handles the entire asset business of the balance sheet, which reflects the kind of respect and stature he commands within the organisation, both at the board and at the management level. So, that will continue. In fact, he will only get more responsibilities as we move forward,” Jagdishan told analysts in a call.

Board members said they were “baffled” at Chakraborty’s sudden decision to step down.

“None of the board members are aware of the specific issues which Mr. Chakraborty wrote in his letter. The board members asked him yesterday, and he didn’t give any specific explanation,” Mistry said.

Acknowledging that interpersonal differences could arise in any organisation, Mistry clarified that there had been no divergence of views at the board level.

“Let me reassure you that in no board meeting has there been any kind of complete differences of opinion, and the minutes will reflect that. Human beings are human beings. There will always be some relationship issues between individuals. Those kinds of things happen. But there is no power struggle in the bank,” he said.