No Governance-Related Concerns At Systemic Level, New HDFC Bank Chairman Says

India’s biggest private lender HDFC Bank Chairman Rajiv Kumar said the bank’s ethos and internal control systems remain robust and will be further strengthened and empowered. He added that the board is committed to maintaining the highest standards of corporate governance, stressing that no governance related concerns at systemic level.

At the bank’s Annual General Meeting on Wednesday, August 5, Kumar said large banks such as HDFC Bank are bound to face issues from time to time, but what matters is resolving them promptly. He noted that the bank’s strong internal control framework successfully identified deviations, underscoring the effectiveness of its risk management systems.

He further said HDFC Bank remains fundamentally strong with a pristine balance sheet with no governance-related issues.
Kumar clarification on governance concerns come months after the resignation of the bank’s part-time chairman, Atanu Chakraborty, on March 18 citing “certain happenings and practices” within the bank, observed over two years, that were “not in congruence” with his personal values and ethics.

Meanwhile, HDFC Bank Managing Director and CEO Sashidhar Jagdishan said private lender is well positioned to deal with any lawsuit in the United States. He added that the benefits from the HDFC Ltd. merger will accrue over a longer period rather than immediately.

Last week, multiple US law firms launched investigations into whether the private sector lender may have violated federal securities laws. The investigations are being led by Glancy Prongay Wolke & Rotter, alongside the Law Offices of Frank R. Cruz and Howard G. Smith. The firms are examining whether HDFC Bank made materially misleading statements or failed to adequately disclose information relevant to US investors.

Jagdishan also said the bank’s investments in artificial intelligence and digital capabilities are expected to improve return on assets (RoA) over time. He expressed confidence that the cost of funds and net interest margin (NIM) would improve from the April–June quarter of FY27 onward.

The lender’s net profit for the first quarter of fiscal year 2027 rose 5% year-on-year to Rs 19,059 crore, as against Rs 18,155 crore in the year-ago period, in-line with analysts’ estimates of Rs 19,720 crore. Net Interest Income (NII), the difference between interest earned and interest paid, rose 6.7% to Rs 33,534 crore from Rs 31,438 crore. Provisions dropped significantly on a year-on-year basis by 78.8% to Rs 3,060 crore from Rs 14,441 crore. However they rose sequentially by 17.2% to Rs 3,060 crore from Rs 2,610 crore.  Asset quality worsened as compared to the preceding quarter with Gross NPA rising to 1.17% from 1.15% and Net NPA rising to 0.41% from 0.38%

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