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RBI's Green Light Crucial for HDFC's Jagdishan Third Term
29 Jun
Summary
- HDFC board nears reappointing CEO after legal review clears him.
- RBI approval is critical for Jagdishan's third term as CEO.
- Bank's high loan-to-deposit ratio is a post-merger challenge.
HDFC Bank's board is moving towards reappointing Sashidhar Jagdishan as MD & CEO for a third term. This decision comes after external legal reviews found no merit in concerns previously raised by former chairman Atanu Chakraborty.
Jagdishan's current three-year term is set to end in October 2026. The board's formal reappointment process and the selection of a new non-executive chairman were awaiting the outcome of these legal reviews.
While the board and Macquarie Capital support Jagdishan, the ultimate approval rests with the Reserve Bank of India (RBI). Analysts indicate the RBI may evaluate additional factors beyond the legal review's findings.
A significant challenge for the bank, particularly since the merger with HDFC Ltd in 2023, is its elevated loan-to-deposit ratio. This ratio, a result of integrating a large mortgage book funded by borrowings, remains a work in progress.
Rajeshwar Rao, former RBI deputy governor, is reportedly among candidates shortlisted for the chairman's post, with the board to forward three nominees to the RBI.
