RBI has approved a transition plan at HDFC Bank after its chairman stepped down, while investors reacted sharply, pushing the stock lower during Thursday’s trading session.
HDFC Bank Representational image (Photo:IANS)
The Reserve Bank of India on Thursday stepped in after HDFC Bank’s part-time Chairman Atanu Chakraborty resigned, saying the lender continues to remain stable and well-placed financially.
The clarification comes as the market reacted sharply to the leadership change, with investors closely watching what it could mean for one of India’s most important banks. The RBI said it has cleared the bank’s proposal for an interim arrangement for the chairman’s role and sees no immediate cause for concern.
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Chakraborty reportedly resigned citing issues with the lender over “values and ethics”.
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In its statement, the central bank said its regular reviews have not thrown up any serious issues in the way the bank is run. It described HDFC Bank as a financially sound institution, with adequate capital buffers and enough liquidity to meet its obligations.
The regulator also pointed out that the bank continues to be managed by an experienced leadership team, backed by a professional board. As a Domestic Systemically Important Bank, HDFC Bank remains closely monitored, and the RBI said it will stay engaged with the bank’s management during this phase.
Following the resignation, the bank held a call with analysts and investors on Thursday morning to address concerns and explain the transition. These calls matter more when there’s a sudden change at the top, and markets are already on edge.
HDFC Bank remains a key player in the country’s banking system, and what the management signals next could influence investor confidence in the short term.
The market reaction, however, was immediate. Shares of the bank fell sharply during the day, reflecting nervousness around the sudden change at the top.
The stock dropped over 5 per cent at one stage. At the time of filing this report, it was trading at Rs 804, compared to Rs 846 at the previous close, a decline of more than 4 per cent.
HDFC Bank, among India’s largest private lenders, currently has a market capitalisation of Rs 12,38,131.08 crore.
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