MUMBAI — HDFC Bank's newly appointed chairman Rajiv Kumar said the lender's corporate governance remains fundamentally uncompromised and that the board will ensure control functions stay fully empowered, with zero tolerance for unethical practices, according to Business Today.
Business Today reported that Kumar's statement, made amid leadership changes and external scrutiny after the exit of the previous chairman, came as he rejected claims of systemic governance lapses. His predecessor, Atanu Chakraborty, a former economic affairs secretary, had quit earlier this year citing "values and ethics." Kumar, who previously served as finance secretary and chief election commissioner, said oversight, transparency, and execution remain intact.
Governance Review and Stock Exchange Disclosure
Kumar said, as reported by Business Today, that after the resignation the bank appointed external legal counsel under the supervision of independent directors to examine the allegations. Findings were disclosed to stock exchanges on June 26, 2026. "Let me reiterate, on my behalf and on behalf of the Board, that the bank is fundamentally strong, with a pristine balance sheet. There are no governance related concerns at the systemic level," he said.
The Board will ensure that control functions remain fully empowered to have zero tolerance towards any unethical practice, which will be dealt with speed and firmness on a case-to-case basis.
— Rajiv Kumar, chairman, HDFC Bank
Control Functions and Case-by-Case Accountability
Kumar said the bank's ethos and internal control systems are strong, and assured that "this will be further strengthened and empowered." He described governance risks as isolated and manageable events rather than structural failures, with existing processes designed to detect and address such issues. "Strong institutions are defined by how good the policy and processes are, across their operating and governance domains," he said. "The process should identify issues, investigate them, act upon them, disclose them where required and hold everyone involved accountable."
Business Today reported that Kumar added the bank has demonstrated the presence of control systems and oversight at committee levels to identify deviations, if any.
Post-Merger Balance Sheet Adjustments
On operations, Kumar said the bank faces balance sheet adjustments after its merger with HDFC, which have affected net interest margin and CASA ratio. He said the lender aims to improve these metrics over the next two to three years by increasing deposit market share and expanding consumption-led lending.
| Metric | Stated Impact | Stated Plan |
|---|---|---|
| Net interest margin | Affected by post-merger adjustments | Improve over 2–3 years |
| CASA ratio | Affected by post-merger adjustments | Improve over 2–3 years |
| Deposit market share | Not quantified | Increase |
| Consumption-led lending | Not quantified | Expand |
Implications for CFOs and Treasury Professionals
For CFOs, treasury directors, and investors tracking Indian banking counterparties, the governance statement sets a clear reference point on the bank's control environment. Kumar's pledge that control functions remain fully empowered, with unethical practices dealt with "speed and firmness on a case-to-case basis," directly addresses counterparty conduct concerns. The disclosure of external legal counsel findings to stock exchanges on June 26, 2026 establishes a defined timeline for governance accountability. On balance sheet fundamentals, the stated plan to lift net interest margin and CASA ratio within two to three years through deposit market share gains and consumption-led lending signals the bank's post-merger priorities.
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