HDFC Bank’s MD and CEO Sashidhar Jagdishan said on Saturday that he was rooting for interim chairman Keki Mistry to stay on beyond the mandated three month period, although it will depend on the decision of other board members too.
“We are all rooting for Mistry for the post. But, of course, we do believe that there are certain processes that we need to conclude, before we can even put forth for the deliberations in the NRC (nomination and remuneration committee) and at the board, and before we can provide recommendations to the regulator,” Jagdishan said in an interaction with reporters.
They had sufficient time for that and it would be taken up in due course, he added.
Keki Mistry, a veteran banker, who was the vice-chairman of mortgage lender HDFC, before it was merged with its then subsidiary HDFC Bank, was appointed as the interim chairman of the bank after its part-time chairman Atanu Chakraborty abruptly quit as the chairman in March. In his resignation letter he had mentioned that certain happenings and practices within HDFC Bank were not in congruence with his personal values and ethics. That raised a lot of eyebrows and the stock also took a knock at the time, despite the management clarifying that there were no operational issues raised.
Subsequently, the bank appointed external law firms to investigate the matter.
“The legal review is in progress. Obviously, the volume of data that the council have to go through is rather voluminous, and that’s why probably its taking time. But, as and when it comes out, the bank will come into the open and provide a summary of the same,” Jagdishan stated.
Jagdishan’s tenure as MD and CEO is also up renewal later this year and the board is “seized up” of the matter, noted Kaizad Bharucha, the bank’s deputy managing director.
“The NRC and the board is completely seized of the matter, and this will be taken up in due course as the necessary process would require,” he said.
Just days after the part-time chairman Chakraborty resigned in March, HDFC Bank fired three senior officials for issues related to gaps in onboarding of clients at its branch in Dubai International Financial Centre.
The allegations were that AT1 bonds of Credit Suisse were mis-sold to a few clients. Swiss Authorities wrote-down the AT1 bonds to zero later when Credit Suisse faced financial difficulties and was taken over by rival UBS.
Jagdishan stressed that the lender guardrails that had been introduced long ago in the sale of third-party products.
“Some of the processes that we have laid out includes, a pre verification and the confirmation on video whether the customer has understood the product etc. so that its not a coerced sale. We also have a clear definition of the exclusions that we have where we don’t sell (products) to marginal segments, or we don’t sell to the senior citizens beyond a certain age,” said Jagdishan.
He, however, admitted things couldn’t be perfect given the size and scale, but any such matters were taken care of swiftly.
“Of course, we are not perfect because we deal, there are about 215,000 people across 9,689 branches in the country in 4,000 towns. Sometimes there will be some amount of
exuberance from these people, but we do address them rather swiftly and very sternly, if at all there is any event of mis-selling,” pointed Jagdishan.
HDFC Bank, the country’s second largest lender, reported a 9 per cent year-on-year increase in its January-March quarter net profit at Rs 19,221 crore, while net interest income rose 3.2 per cent to Rs 33,082 crore.
HDFC Bank shares had closed up 0.6 per cent at Rs 799.90 on the BSE on Friday.
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