HDFC Bank's board is scheduled to convene on June 18 to review the findings of a legal investigation into concerns raised by former chairman Atanu Chakraborty in his resignation letter. Preliminary reports from the law firms appointed by the bank, including Wadia Ghandy, Trilegal, and US-based Wilson Sonsini, suggest there were no governance irregularities or ethical breaches as implied in Chakraborty's letter. The audit committee reportedly met on Tuesday, ahead of the full board meeting, to discuss these findings.
In addition to the legal review, the board will also discuss a three-month extension for interim part-time chairman Keki Mistry. Mistry's current term is set to expire on June 18, and the bank has already approached the Reserve Bank of India (RBI) for approval of this extension. Sources indicate that a response from the RBI is still awaited.
The board's decision regarding Mistry's extension is intended to ensure continuity during the leadership transition and while a permanent chairman is finalized. It has been reported that the central bank is urging HDFC Bank to expedite the appointment of a permanent non-executive chairman to avoid delays in key strategic and governance decisions, though Mistry may continue temporarily.
Investors appear to be reacting positively to the progress in finding a new permanent non-executive chairman. HDFC Bank's stock saw a nearly 2% increase on Thursday, June 18, outperforming much of the market and contributing to gains in the Nifty Bank index.
