HDFC Bank Chairman Resigns Citing "Ethics" — Stock Crashes 8%, ₹66,000 Crore Wiped Out

HDFC Bank is navigating one of the most uncomfortable episodes in its recent history after the sudden resignation of its part-time chairman, Atanu Chakraborty, sent shockwaves through Dalal Street.

Chakraborty, who had been serving as independent director and part-time chairman since May 2021, submitted his resignation on March 17, 2026, with it taking effect on March 18. His letter cited that "certain happenings and practices within the bank, that I have observed over the last two years, are not in congruence with my personal values and ethics." He confirmed there were no other material reasons.

The market's reaction was swift and sharp. HDFC Bank's shares crashed over 8% intraday on March 19, hitting a fresh 52-week low of ₹770 on the NSE. Its American Depository Receipts (ADRs) on the NYSE fell 7.3% overnight to $26.6. Over two trading sessions, the stock has shed nearly 7%, with ₹66,433 crore in market cap wiped out.

The ambiguity surrounding the resignation is what spooked investors most. During an investor conference call, interim chairman Keki Mistry — appointed with RBI's approval for three months — said the board had found no specific operational or governance issues. HDFC Bank MD & CEO Sashidhar Jagdishan added, "We are not sure what triggered the resignation," only deepening investor uncertainty.

The RBI stepped in unusually fast, issuing a public statement confirming that HDFC Bank remains a Domestic Systemically Important Bank (D-SIB), well-capitalised and financially sound. However, it noted it would continue to "engage with the board and management on the way forward."

Brokerages have flagged the stock as risky in the near term. JPMorgan maintained a 'Neutral' rating, saying the "negative perception" from governance uncertainty "may weigh on the stock until clarity emerges." Antique Stock Broking cut its target price, calling the resignation a "shadow over the board and management team." As of March 20, shares were trading around ₹791, down about 1% early in the session.

Key near-term triggers include the appointment of a permanent chairman and Jagdishan's term renewal, due in October 2026. Analysts say strong operating performance in the coming quarters and regulatory clarity are critical to restoring investor confidence.

For now, HDFC Bank remains a stock to watch very closely — not sell in panic, but not add aggressively either.