The RBI on Thursday said that HDFC Bank is a Domestic Systemically Important Bank (D-SIB) with sound financials
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NEW DELHI — The Reserve Bank of India (RBI) on Thursday said that HDFC Bank is a Domestic Systemically Important Bank (D-SIB) with sound financials, professionally run board and competent management team, after the resignation of part-time chairman Atanu Chakraborty over alleged “ethical differences” in one of the biggest private lenders.
The Central Bank said in a statement that it has taken note of the recent developments in HDFC Bank.
“A transition arrangement as requested by the Bank has been approved by Reserve Bank as regards the position of Part Time Chairman of the Bank,” said the RBI.
It added that basis its periodical assessment, “there are no material concerns on record as regards its conduct or governance”.
“The bank remains well-capitalised and the financial position of the bank remains satisfactory with sufficient liquidity. Reserve Bank will continue to engage with the Board and management on the way forward,” said the Central Bank in a statement.
Chakraborty had resigned citing differences with the lender over "values and ethics”.
The RBI approved the appointment of long-time group insider Keki Mistry as an interim part-time chairman for three months, effective March 19, the bank said in its exchange filing.
Mistry sought to reassure investors and analysts that there are “no major issues” at the bank following the sudden resignation of Chakraborty, even as the bank shares came under pressure.
Speaking on a conference call, Mistry said he would not have accepted the interim role if it did not align with his values and principles. “I would not have taken this responsibility at the age of 71 if it is not aligning to my values and principles,” Mistry said.
There was no power struggle in the bank as you put it, he said, adding that "there was nothing substantive”.
He further stated that the fact that RBI are comfortable with what is going on in the bank is reflected in the fact that, “within a short period of time, they approved my appointment for three months”.