HDFC Emphasizes Zero Tolerance for Unethical Practices in Corporate Governance
MUMBAI: HDFC Bank’s new chairman, Rajiv Kumar, has reaffirmed the bank’s commitment to corporate governance, stating that it remains fundamentally uncompromised. He emphasized that the board will ensure that control functions are fully empowered and maintain a zero-tolerance policy for unethical practices. Kumar’s comments come in the wake of leadership changes and scrutiny following the resignation of former chairman Atanu Chakraborty earlier this year, who cited concerns over values and ethics.
Kumar, who previously served as finance secretary and chief election commissioner, rejected allegations of systemic governance failures. He assured stakeholders that the bank’s ethos and internal control systems are robust and will be further strengthened. Following Chakraborty’s resignation, the bank engaged external legal counsel under the supervision of independent directors to investigate the allegations, with findings disclosed to stock exchanges on June 26, 2026. “The bank is fundamentally strong, with a pristine balance sheet. There are no governance-related concerns at the systemic level,” Kumar stated.
He characterized governance risks as isolated and manageable events rather than indicative of structural failures. Kumar explained that the bank’s processes are designed to detect and address issues effectively. “Strong institutions are defined by how good the policy and processes are, across their operating and governance domains,” he said. He added that the board will ensure control functions remain empowered to address any unethical practices swiftly and firmly on a case-by-case basis.
On operational matters, Kumar noted that the bank is experiencing balance sheet adjustments following its merger with HDFC, which have impacted its net interest margin and CASA ratio. He expressed confidence that the bank will improve these metrics over the next two to three years by increasing its deposit market share and expanding consumption-led lending.
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