Flurry of senior-level exits at HDFC Bank points to likely revamp

A flurry of top-level exits at HDFC Bank Ltd has turned the spotlight on the country’s largest private sector lender, which is set for a top leadership change later this year. Since March, the bank has seen the exits of Abhay Aima, group head of private banking; Ashok Khanna, group head of secured vehicle loans; and Munish Mittal, chief information officer—all HDFC Bank veterans and close aides of its long-time managing director Aditya Puri.

People aware of the matter have pointed to an expected top management reshuffle in HDFC Bank before Puri leaves, with more exits likely in the coming months.

The bank has sent three shortlisted names to Reserve Bank of India as Puri’s successor: Sashidhar Jagdishan and Kaizad Bharucha—both executive directors of the bank—and Sunil Garg, global chief executive officer of Citi Commercial Bank.

HDFC Bank has described all three exits as routine developments.

However, without disclosing specifics, it has said that it is indeed investigating alleged business malpractices in its vehicle finance business, which was headed by Khanna till March.

Khanna, according to a Bloomberg News report, was denied an extension after receiving two extensions post-retirement.

The Bloomberg News report on Monday said that Khanna’s exit is linked to an “internal audit of the bank’s vehicle dealer lending as well as allegations of conflicts of interest in the purchase of global positioning systems for vehicles financed by the bank”.

According to the private lender, the reason behind Mittal’s abrupt exit is his decision to pursue higher studies in a foreign university. Aima, on the other hand, has decided to take an early retirement.

HDFC Bank, however, said it has looked into all complaints and has followed due process, without mentioning any specific individual or complaint.

“HDFC Bank has a robust policy and process to deal with complaints and allegations and take action as appropriate. The process and the outcome of dealing with such complaints is an internal matter of the bank where we are required to be guided by our policy on disclosure. Suffice to say that as a bank, we’ve always upheld the highest standards of governance and propriety at all times and will continue to do so,” an HDFC Bank spokesperson said. The board of HDFC Bank is set to meet on Friday.

The bank had constituted a six-member search committee last year to find a replacement for Puri and hired Egon Zehnder for assistance. Puri was an adviser to the search committee.

“Puri has made it clear to the board that he is backing Sashi’s candidature. However, if Sashi is appointed, there is a possibility that Bharucha will leave. So, getting an outsider is the best option as he brings in fresh ideas,” a person aware of the matter said.

Some of the names Egon Zehnder recommended were Mastercard chief executive officer Ajay Banga, who is likely to take charge as chairman in January 2021; and Piyush Gupta, global chief executive officer of DBS Bank.

In 2018, private sector lender Axis Bank had a similar series of high-level exits after the retirement of Shikha Sharma, who was succeeded by Amitabh Chaudhary as managing director and chief executive officer.