Finance Ministry official calls HDFC Bank 'a strong institution with strong fundamentals'

New Delhi: A day after HDFC Bank Chairman Atanu Chakraborty resigned on ethical concerns, a top Finance Ministry official on Thursday said the bank is a "strong institution with strong fundamentals".

Financial Services Secretary M Nagaraju said the Reserve Bank of India (RBI) has already issued a statement in this regard.

"HDFC Bank is a strong institution with strong fundamentals," he told reporters.

The remarks come after the sudden exit of Chakraborty as chairman of HDFC Bank -- the country's second-biggest lender -- effective March 18, 2026, citing ethical concerns. This is the first time that a part-time chairman of HDFC Bank has left mid-way, raising concerns over its functioning.

Earlier in the day, the Reserve Bank said there were no material concerns on record as regards the bank's conduct or governance.

"HDFC Bank is a Domestic Systemically Important Bank (D-SIB) with sound financials, a professionally run board and a competent management team. Based on our periodical assessment, there are no material concerns on record as regards its conduct or governance," the RBI said in a statement.

The statement emphasised that the bank remains well-capitalised and its financial position remains satisfactory with sufficient liquidity.

The RBI has approved a transition arrangement, as requested by the bank, as regards the position of its part-time chairman.

According to the HDFC Bank's regulatory filing, the RBI on Wednesday granted its approval for the appointment of Keki Mistry as an interim part-time chairman with effect from March 19, 2026, for a period of three months.

The RBI will continue to engage with the board and management on the way forward, it added.

Chakraborty's exit has come ahead of the closure of the ongoing financial year 2025-26.

"Certain happenings and practices within the bank, that I have observed over the last two years, are not in congruence with my personal values and ethics. This is the basis of my aforementioned decision," Chakraborty said in his resignation letter dated March 17.

In the letter addressed to the Chairman of Governance, Nomination, and Remuneration Committee, HK Bhanwala, Chakraborty said, "There are no other material reasons for my resignation other than those stated above".

Chakraborty was appointed part-time chairman effective May 5, 2021, almost a year after his retirement as Economic Affairs Secretary.

His term was extended for another three years in 2024 till May 4, 2027.

Chakraborty, a 1985 batch IAS officer of Gujarat cadre, retired as Secretary of the Department of Economic Affairs in April 2020.

Prior to that, he was Secretary of the Department of Investment and Public Asset Management (DIPAM). Both departments come under the Finance Ministry. Chakraborty became chairman during the reverse merger process of the bank with the parent entity HDFC Ltd, a leading mortgage firm in the country.

The merger of HDFC Ltd with HDFC Bank became effective on July 1, 2023, creating a financial behemoth with a combined balance sheet of over Rs 18 lakh crore.