Sashidhar Jagdishan Is HDFC Bank’s New CEO
Sashidhar Jagdishan will be the new chief executive officer of HDFC Bank Ltd., India’s largest private lender.
The Reserve Bank of India has approved Jagdishan’s candidature from a list of three potential chief executives suggested by the board of the private lender, according to the private lender’s press release on the stock exchange.
Jagdishan will replace Aditya Puri, who has led the bank since its inception, for a period of three years.
A meeting of the Board of Directors of the Bank will be convened in due course inter alia to approve the appointment of Sashidhar Jagdishan as the Managing Director and CEO of the Bank, in place of Aditya Puri, who is due to retire as Managing Director of the Bank on Oct. 26, 2020.HDFC Bank statement
Who Is Sashidhar Jagdishan
Jagdishan joined HDFC Bank in 1996, two years into the lender’s existence. Jagdishan has always kept a low profile at the bank, in stark contrast to Puri’s more boisterous personality. He has been part of the inner circle of top executives at the bank, who are seen as responsible for setting up the bank for an extended period of strong growth.
Till around August 2018, it was widely believed that Paresh Sukthankar, then deputy managing director of the bank, would succeed Puri. Sukthankar’s sudden exit from the bank, however, left the succession question open-ended.
In August 2019, HDFC Bank’s board asked Jagdishan to move away from his role as chief financial officer and appointed him ‘change agent’. But the finance function of the bank continued to remain with him. This was widely seen as Puri reposing faith in Jagdishan to be his successor.
As a change agent, Jagdishan has been at the forefront in making key strategy decisions. He has also been thrown into firefighting. For instance, he led the private bank’s response during the severe technological problems it faced in December 2019. For three consecutive days, HDFC Bank’s net banking and mobile banking services went down, severely affecting the bank’s large base of salaried customers.
In November 2019, the bank’s board decided that Jagdishan would be elevated to whole-time director status. However, the RBI asked the board to first complete the CEO transition process and then make future board appointments.
The Upcoming Transition
Jagdishan was among two internal candidates suggested for the post. The other internal candidate was Kaizad Bharucha, who manages the private sector lender’s wholesale banking business. The third name suggested was Sunil Garg, who heads Citi Commercial Bank.
At the bank’s annual general meeting, Puri said that “in his mind, his successor is clear.” While not giving any hints on his choice between Jagdishan and Bharucha, Puri said “There has been a lot of talk about the successor not being with us for a long time. Our potential successor has been with us for 25 years. My successor was always in place, at least in my mind.”
Jagdhisan takes over at a time when the bank has seen concerns emerge over pratices at its vehicle loans division. An enquiry had been conducted into the vehicle loans division, which brought out “personal misconduct” issues. Appropriate action has been taken against the employees, Puri said at the AGM.
The bank has also recently seen three senior level exits -- Abhay Aima (group head of private banking); Ashok Khanna (group head of secured vehicle loans); Munish Mittal (chief information officer).
The lender was also caught on the wrong foot when it chose to debit the accounts of Altico Capital, which went into default. The RBI has asked the bank to return those funds, Puri disclosed.
The bank’s performance, however, has remained strong. For the first quarter of FY21, the bank reported a 19.5% increase in net profit to Rs 6,659 crore. Its bad loans remained in check, with the gross non performing assets ratio at 1.36% as of the June-ended quarter. The bank disclosed that a little over 9% of loans are under an RBI-approved moratorium.