HDFC Bank weighs Kaizad Bharucha and outsider for next CEO role

MUMBAI: HDFC Bank is considering deputy managing director Kaizad Bharucha as one of two candidates for its next chief executive, while also evaluating an external candidate, according to a Reuters report.

India’s largest private sector lender is searching for a successor to managing director and chief executive Sashidhar Jagdishan, who is due to retire at the end of his second term in October. The bank announced on Saturday that Jagdishan had decided not to seek reappointment and that it would fast-track the appointment of his successor.

The bank is also looking at an external candidate to meet Reserve Bank of India requirements that lenders submit multiple names for the CEO position, the report said. They declined to be identified because the discussions are private.

Bharucha is among the leading internal candidates, having spent several years at HDFC Bank and currently overseeing its retail and wholesale businesses. His experience across the bank’s major operations makes him a natural contender for the top job.

His retirement timeline also gives the bank room to consider him. Bharucha is not due to retire until 2029, when he will have completed 15 years as a full-time director. RBI rules generally cap the tenure of a whole-time director at 15 years, although exemptions can be sought.

The CEO search comes after a turbulent six months for HDFC Bank, with leadership and governance questions weighing on its shares.

Former chairman Atanu Chakraborty resigned in March, saying certain practices at the bank were at odds with his “personal values and ethics”. HDFC Bank later commissioned an external legal review, which found no evidence to substantiate Chakraborty’s governance concerns.

The bank also said last month that its board had penalised Jagdishan and three other employees in a separate matter relating to the pricing of large deposits.

The developments have added pressure on the lender to provide clarity over its leadership. HDFC Bank’s shares have fallen about 27 per cent this year, with the decline accelerating after Chakraborty’s departure.

Foreign investors held around 40 per cent of HDFC Bank as of the end of June, making investor confidence a key consideration as the bank prepares for the transition.

Investors have also expressed concern over the benefits of HDFC Bank’s 2023 merger with its former parent HDFC Ltd, a transaction overseen by Jagdishan.

The choice between an internal successor such as Bharucha and an outsider could therefore shape more than just the bank’s leadership chart. It will also signal how HDFC Bank intends to restore confidence and move beyond a period of heightened scrutiny.