Mumbai, Aug 30 : Sashidhar Jagdishan’s six-year tenure as managing director and chief executive officer of HDFC Bank was marked by regulatory challenges, the landmark merger with HDFC Ltd and growing scrutiny over governance and overseas operations.
Jagdishan, 61, took charge of the country’s largest private-sector lender in 2020, succeeding Aditya Puri, who had led the bank from its inception in 1994 for 26 years.
Within months of his appointment, HDFC Bank faced regulatory action from the Reserve Bank of India (RBI). In December 2020, the central bank barred the lender from issuing new credit cards and launching new digital initiatives following repeated outages affecting its internet and mobile banking services.
The restrictions remained in place for around 15 months as the bank worked to address the technology-related issues and strengthen its digital infrastructure.
HDFC merger became a major challengeOne of the biggest challenges during Jagdishan’s tenure was the merger of HDFC Ltd with HDFC Bank, which became effective on July 1, 2023. The transaction was the largest merger in India’s banking sector and significantly changed the size and structure of HDFC Bank.
Following the merger, the bank inherited HDFC Ltd’s sizeable loan portfolio without an equivalent increase in its deposit base. This pushed its credit-deposit ratio to around 110 per cent, creating pressure on the lender to increase deposits and manage loan growth.
The bank subsequently moderated its lending growth and stepped up efforts to mobilise deposits. The changing balance between loans and deposits also became an important factor affecting the bank’s growth trajectory and shareholder returns.
Governance and overseas operations under scrutiny
Jagdishan’s tenure also coincided with increased scrutiny of the bank’s governance practices and certain aspects of its overseas operations, including its Dubai business.
The combination of regulatory setbacks, technology-related concerns, the massive HDFC merger and subsequent scrutiny made his tenure notably different from the long period of relative stability under Puri.
The challenges also came at a time when India’s banking sector was undergoing rapid digitalisation and facing increasing regulatory expectations around technology, governance, risk management and customer protection.
Overall, Jagdishan’s six years at HDFC Bank were shaped by a series of major transitions—from dealing with RBI restrictions early in his tenure to managing the complexities of the HDFC merger and navigating subsequent regulatory and governance scrutiny.
