ICICI Bank veteran Anup Bagchi’s appointment as the managing director and chief executive officer of HDFC Bank is the latest instance of the regulator approving external candidates to helm private sector banks.
Announced late on 1 October, Bagchi’s appointment comes after he emerged as the frontrunner for the position over internal candidate and current deputy managing director Kaizad Bharucha.
“RBI might want to bring in more outsiders that are not part of the system as they can bring in more independence with them. Also, age is in Bagchi’s favour, and the regulator would want continuity and stability in India's largest private sector bank,” said Siddharth Goel, director, Fitch Ratings.
The decision to pick Bagchi, 56, follows other such recent approvals, including the appointment of Prashant Kumar at YES Bank in March 2020 and Vinay Tonse in April 2026, both former State Bank of India officials. Last year, RBI approved the appointment of Axis Bank's Rajiv Anand as the head of IndusInd Bank, following which he took charge in August 2025. In September 2024, Kotak Bank’s KVS Manian took over as the head of Federal Bank, whereas Mahesh Muralidhar Pai, previously chief general manager at Canara Bank, took over as MD of South Indian Bank from 1 October.
More recently, Kotak Bank on Thursday said that RBI has approved the appointment of Anup Kumar Saha as MD and CEO. While Saha heads the retail bank, government business, data analytics and marketing functions at Kotak Bank, he is largely being viewed as an external candidate given that he joined the bank only nine months ago in January 2026, after eight-year and 14-year stints at Bajaj Finance and ICICI Bank, respectively.
Bringing in a fresh perspective was especially important for HDFC Bank, given that the leadership change comes at a time when the bank has been facing corporate governance concerns and allegations of aggressive marketing practices over the past year, according to experts.
“To some extent, the reputation of the bank has taken a hit. That means if an insider is going to continue as MD, customers and the market might question what plan does he have to bring changes if he couldn’t do much being a part of the board for so long? There’s no guarantee he'll do all those things now,” said a senior banker and board member of a PSU bank on the condition of anonymity, adding that appointing an external candidate is a better and more neutral option which should make it easier to unite and gather the support of the board.
Best man for the job
In addition to being new to the bank, Bagchi’s extensive mainstream banking experience and that across other financial-services firms is being seen as a win to boost HDFC Bank’s business performance.
“The real issue investors have is HDFC's ability to maintain earnings growth and have a robust business model post the merger. So from HDFC’s perspective it has to be somebody who can get the business model right,” said Abizer Diwanji, founder, NeoStart Advisors, adding that Bagchi has more retail and broking as well as insurance experience.
“HDFC’s processes are restricted primarily to banking, so that may weigh in his favour,” he said, citing the example of ICICI Bank’s ‘3-in-one’ account started by Bagchi, which facilitated linking of brokers’ accounts to savings accounts thereby increasing the bank’s float. “He will be able to bring some of that expertise into HDFC as he has more well-rounded experience.”
Bagchi served as MD and CEO of ICICI Life Insurance (formerly ICICI Prudential Life Insurance) since 2023. Prior to that, he was executive director at ICICI Bank from 2017, overseeing wholesale and transaction banking, markets and proprietary trading.
“His tenure in insurance should be viewed as an addition to, rather than a substitute for, his banking credentials. This combination of institutional familiarity, experience across financial-services businesses and proven chief executive leadership could be particularly relevant for a bank navigating a demanding operational and strategic transition,” Suresh Ganapathy, managing director and head of India research at Macquarie Capital said in a note to investors on 1 October.
Bagchi’s priority areas will include driving up retail growth, particularly retail unsecured loans; arrest the depreciation in and increase the share of low-cost savings and current account (CASA) deposits; enhance the technology architecture; improve the customer service culture; and improve cross-sell ratios. “There is a lot of scope to improve the group synergies and utilise the subsidiaries better and cross-sell seamlessly to the bank customers,” the note said.
Need for continuity
A key factor that also seems to have worked in Bagchi’s favour is that his competitor Bharucha's current three-year term is set to end in April 2029.
The regulatory cap of 15 years on the tenure of whole-time directors at private sector banks would have meant that either RBI would have needed to award an extension to Bharucha as a one-time exemption or that the bank would have had to look for another candidate to succeed Bharucha after April 2029.
“Whenever any MD and CEO of a bank is appointed, they come with a certain vision for the bank, certain strategies and plan of action, which are typically long term in nature. Bharucha has less time, so it will be difficult for him to implement or execute any new plans,” the senior banker quoted above said. In comparison, an external candidate, subject to his performance, will have the option to continue even beyond this three-year term, helping ensure continuity at the bank, which is something that HDFC Bank “really needs right now”.
Macquarie’s Ganapathy said that Bagchi’s age is a positive, allowing him to easily serve for 9-12 years, and come with a long-term view and vision to change the bank. He, however, warned that an external candidate may have to deal with senior management exits as well as some “long vintage branch managers”. “The top priority for the new external CEO is to stabilize the senior management and control attrition levels.”