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The RBI approved the appointment of Anup Bagchi as HDFC Bank’s new MD and CEO, bringing an end to weeks of uncertainty around the lender’s leadership.
Anup Bagchi, currently MD & CEO of ICICI Prudential Life Insurance, will take charge of HDFC Bank from October 27 for a three-year term.
HDFC Bank’s appointment of Anup Bagchi as its new managing director and CEO marks the latest step in a governance reset that the lender has undertaken over the past three months. It follows a series of decisions by the bank’s board to address legacy issues, senior-level accountability and succession, as well as concerns that had weighed on investor sentiment in recent months.
“The first big move came in July, when HDFC Bank appointed former finance secretary Rajiv Kumar as its part-time non-executive chairman. His record in banking reform was well known. What followed, however, was a matter of sequence rather than reputation,” a source close to the developments told News18.com. The Reserve Bank of India approved Kumar’s appointment for a three-year term beginning July 15.
The timing also put the new chairman at the centre of several important decisions.
By July, India’s largest private sector lender was dealing with multiple issues at the same time — the MSRDC deposit matter, litigation related to Credit Suisse AT1 bonds, questions over accountability at the senior-most levels, uncertainty over the future of MD and CEO Sashidhar Jagdishan, an impending change in the finance function and wider concerns over succession, said the source. The bank’s muted June 2026 quarter earnings had added to market concerns, with the stock coming under pressure as investors sought greater clarity on the lender’s leadership and governance.
MSRDC Matter: Board Takes Action
“Within days of Kumar taking charge, HDFC Bank concluded its internal review of the MSRDC arrangement. The board, acting on the recommendation of a Special Disciplinary Committee of Independent Directors, concluded that the conduct involved ‘business overreach’ but did not find mala fide intent, personal enrichment or improper motive,” the source said.
The bank issued warning letters and imposed a Rs 1 lakh monetary penalty on three senior executives — Jagdishan, CFO Srinivasan Vaidyanathan and Group Head-Retail Assets Arvind Vohra. The matter was also to be communicated to the RBI.
“It also drew a clear line between business overreach and mala fide intent. Accountability reached the top of the organisation and stopped where the evidence stopped,” the source added.
The MSRDC matter relates to HDFC Bank’s arrangements to mobilise large deposits from the Maharashtra State Road Development Corporation in 2017 and 2021. MSRDC had sought a return of around 6.01%, much higher than the bank’s regular savings rate. According to an internal vigilance report cited in media reports, about Rs 45 crore was subsequently paid through the bank’s marketing department as the differential return, rather than as regular interest.
Credit Suisse AT1 Litigation: Time For Clarity
The bank also received clarity on litigation arising from Credit Suisse’s Additional Tier-1 bonds. In September, the Bahrain High Civil Court rejected the final two claims filed by investors against HDFC Bank. Five similar proceedings had already been rejected between July and August, taking the total number of rejected cases to seven.
“The Credit Suisse AT1 litigation was resolved in the bank’s favour. The internal accountability process had run on its own track, independent of that outcome. That distinction matters because the bank did not wait for a court to tell it what to examine,” according to the source.
The Credit Suisse AT1 matter dates back to the collapse of the Swiss bank in 2023, when its Additional Tier 1 (AT1) bonds were written down to zero as part of its takeover by UBS. Some HDFC Bank customers, including NRIs who had invested in the bonds through the bank’s offshore operations, later alleged that they had not been adequately informed about the risks of the instruments and that the bank had mis-sold the securities. The claims led to legal proceedings against HDFC Bank, including seven cases in Bahrain.
CEO’s Exit And Succession
The biggest question for investors, however, remained the future of Jagdishan. On August 29, Jagdishan informed the board that he would not seek reappointment when his current term ends on October 26. The board accepted his decision and moved ahead with the succession process. By September 12, two names had been submitted to the RBI for consideration.
The succession process then moved quickly. The RBI approved the appointment of Anup Bagchi as HDFC Bank’s new MD and CEO, bringing an end to weeks of uncertainty around the lender’s leadership.
The RBI approved the new MD & CEO within 20 days, a notably short interval by the regulator’s usual standards and possibly the fastest in a non-crisis situation, said the source.
“The sequence and speed mattered. Legacy issues, accountability and succession were each addressed in turn, through the Board, as institutional decisions rather than public contests. In about 90 days, a bank facing compounding doubt arrived at clarity on all three,” the source added.
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Ask News18HDFC Bank appointed Anup Bagchi as its new managing director and CEO, bringing an end to weeks of leadership uncertainty. The Reserve Bank of India approved his appointment in a notably short interval of 20 days.
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