ZBiz Exclusive: HDFC Bank CEO on Atanu Chakraborty Resignation & Governance Questions

Very happy to sort of interact with you after a long time. Thank you very much for giving this opportunity.

Yeah. Number one is yes, you know, this came as a big surprise not just to me but to the entire board when we had an unscheduled meeting of the board on March 18th. So obviously, you know, we did sort of request him to check out as to what are the concerns that he expressed in his letter, but unfortunately he said he does not have any concern to share. To which we then, the board asked him, then why don't you remove these lines because this is giving a wrong signal. But he, for whatever reason, I think the lines continue to be maintained. But having said that, Anil, I think he has given some media interviews yesterday and he has retracted his statement in the form saying that there's no wrongdoing in the bank or his resignation is quite routine. So I guess we need to take that into account and probably because, you know, the institution we are, we have one of our pillars, arching pillars of the reason why we are what we are is the fact of integrity and good governance. Not just now but over the years of our existence right from the brand HDFC was instituted 47 years ago and then with the bank being born over the last 32 years, this is the pillar that we have been extremely proud of. This is the only asset that we're very proud of and therefore we were a little bit surprised when a colleague, a member of the board decided to step down with these kind of statements. But then happy to say that he retracted it subsequently in media interviews saying very clearly that there's nothing wrong that happened. Absolutely.

Sir, the regulator, my primary regulator is the Reserve Bank of India. They have been extremely supportive. In fact, when the chairman resigned on 18th of March, the board also sort of proposed the name of an interim chairman in the form of Keki Mistry, who all of you know the kind of stature and the kind of ethics that Mr. Mistry is famous for. The regulator within few hours approved the appointment and that is the reason why we sent out a unified press release in the night of 18th of March to say that not only to inform that Mr. Chakrabarti has decided to step down from the services of the institution as a part-time chairman and we genuinely thank him for his contribution over these years, and the board is also happy to announce the appointment of Keki Mistry as the new interim part-time chairman which has also been approved by the Reserve Bank of India. So I think the fact that the RBI came out with such an express approval and then followed it up on 19th of March, which is yesterday, with a statement to say that we are reasonably comfortable with the institution, which is a wonderful statement to make, gives a lot of comfort to us as management, to the board members and also to the world at large. So we have, you know, we are a large organization, whether us or any other organization in any sector, small or large, no one is perfect as long as humans are involved. Wherever there is human interaction there will be certain issues, there will be errors and omissions, there could be at certain levels commissions, but having said that every issue is addressed in a timebound manner and nothing is hidden below the carpet, that I can assure you. Wherever there are integrity issues, the bank has a very unequivocal standards of not being a part of the severance from the institution. And we have experienced that over these 47 years of the brand and whether it's the management or the board, we are all on the same page as to how we regard integrity as one of the most important points of our service to the customers. Absolutely.

That's correct. No, absolutely sir. We are not perfect. Again, if there are areas that we need to improve, we'll be the first one to improve. But on governance, on ethics, I think we have a very strong tonality at the top and that is not something that, that is something that we are very proud of. That's probably one of our treasures of our existence today. So but having said that there will be control weaknesses, there could be some design weaknesses, there could be compliance weaknesses etc. where we need to see how we can tighten through better automation, better oversight so that we are, you know, minimizing these kind of aberrations that may happen to some of the control and compliance requirements etc. This is an ongoing feature of the institution. That is why we have always put a lot of intensity in this direction and we will continue to do so. This is not something that, you know, someone needs to tell me to do. So this is the part of the business model, part of our day-to-day existence that we do this for a living. So and having said that if there are any external experts who probably the board may want to look at, re-examine, happy to do so. We will not even hesitate to have anyone look at it and then suggest or give feedbacks how to improve upon. This is something that we have had lot of experts to look at it. We have always taken the suggestions. We have tightened it. Obviously, the bank is very large. There are over 9,800 branches in about 4,000 towns. So, there will be issues here and there which are errors and omissions. But there's nothing which talks about any concerns in what the statement has been made by the former chairman.