HDFC ex-chair suggests sale of Credit Suisse perpetual bonds drove rift with bank
Mumbai: Former HDFC Bank chairman Atanu Chakraborty on Monday hinted that the “mis-selling” of Credit Suisse’s perpetual bonds was a point of contention between him and the bank’s management.
Chakraborty, who left his post on March 18, said in an interview to CNBC TV18 that although he usually refrains from sharing discussions in the boardroom, in this case the issue was discussed publicly by managing director Sashidhar Jagdishan. in it 17 March resignation letterr had mentioned “certain events and practices” at the bank that were “incompatible” with his personal values and ethics.
Jagdishan had told The Economic Times on March 23 that HDFC Bank operates in West Asia through branches in Dubai. While Bahraini customer interaction generally takes place in Dubai, transactions are processed in Bahrain. In June 2023, the Dubai Financial Services Authority announced that customers with permanent operations in Dubai must also join there, even if their accounts are booked in Bahrain. This issue arose following losses on Credit Suisse AT1 bonds.
According to Jagdishan, “Our assessment is that this is not fraud or mis-selling but a technical deficiency in documentation and interpretation of legislation.”
On Monday, Chakraborty said he felt that if a large number of customers were to suffer losses, the bank would start to focus on some regulatory focus, or rather a large amount of regulatory focus.
“This also brings reputational risk to the bank. Therefore, while the issues were being addressed, three seniors and 12 others were also reported to be involuntary leavers, with penalties ranging from major fines to minor fines,” he said.
“They’re all at very high levels. But these are hindsight reactions. Something’s been going on for eight years and we’re suddenly taking action. People will say these are concerns, they’ve gone home, maybe they’ve gone home, that’s all.”
The bank had informed the stock exchanges on September 26, 2025 that the Dubai Financial Services Authority had banned the bank’s DIFC branch from doing any business with new customers.
On March 23, HDFC Bank management said the nomination and remuneration committee (GNRC) was conducting an internal investigation. Following this, GNRC announced staff accountability actions against several employees on March 9, including the suspension of these three employees from bank services.
“I think these behavioral problems should not arise in the first place, or strict supervision should ensure that even if they do arise, they are nipped in the bud. But if they are called technically, that leaves some leeway,” Chakraborty said.
Asked if he believed there were larger management issues at HDFC Bank that needed to be addressed, Chakraborty said he did not want to discuss other issues unless they were made public.
“Ideally, events should not occur,” said Chakraborty, adding that this does not mean that events will not occur in a large system; however, incentive structures, management and board oversight must ensure that they are aligned with the interests of depositors, shareholders and the public at large.
Since Chakraborty’s sudden resignation, the bank has been busy allaying investors’ concerns and trying to get to the bottom of the problem. Mint It was reported on March 24 that HDFC Bank would appoint at least two law firms, Wadia Ghandy & Co and Trilegal, to examine the circumstances that led to former chairman Chakraborty’s departure.
These law firms were tasked with helping the bank’s internal legal counsel review pages of minutes of past board meetings to see if Chakraborty had made any serious observations.
The bank’s board and management maintained that they had no knowledge of Chakraborty’s exit and did not specify what he meant as part of his ethical concerns, despite being asked repeatedly.
