HDFC Bank appoints former CEC Rajiv Kumar as chairman

The bank has been on the search for a new chairman after Chakraborty resigned citing certain “happenings and practices”.

Meanwhile, Sashidhar Jagdishan’s current tenure as Managing Director (RBI) and CEO of HDFC Bank is scheduled to end on October 26, 2026. He served in the role from October 27, 2020. His current three-year term (October 27, 2023, to October 26, 2026) was approved by the RBI in 2023. The board is expected to recommend Jagdishan for a third term as MD and CEO, subject to RBI approval. The reappointment process, which has been on hold pending the external legal review, is likely to happen as the law firms had submitted the report, exonerating the bank.

Decisive policy, execution; headed key bodies

Kumar also briefly served as chairman of Public Enterprises Selection Board (PESB). As secretary, Department of Financial Services (DFS) from 2017 to 2020, he assumed charge when public sector banks were facing high levels of unrecognised non-performing assets (NPAs), capital inadequacy, lenders frozen out of fresh credit, rampant gold plating, diversion and recirculation of equity and debt to leverage fresh credit. The sector also faced governance challenges including large consortiums, NBFCs struggling to fill microcredit gaps post-demonetisation, and Ponzi schemes defrauding citizens.

Within a fortnight of him joining the DFS, accounts of about 3.38 lakh shell firms were frozen. It was followed by curbs on Ponzi schemes through the passage of the Banning of Unregulated Deposit Schemes Act, 2019. Through decisive policy direction and execution, he led the clean-up of public sector bank balance sheets by mandating transparent recognition and provisioning of NPAs, and strengthening borrower accountability under the Insolvency and Bankruptcy Code framework.

He headed most key bodies shaping the country’s financial architecture, ranging from the Central Board of Reserve Bank, the Financial Stability and Development Council, the Financial Sector Regulatory Appointments Search Committee, Secretary of the Appointment Committee of the Cabinet, the Public Enterprises Selection Board, the Bank Board Bureau, to the boards of SBI and NABARD. He was also part of an expert committee on the central bank’s economic capital framework, and a committee on NITI Aayog’s restructuring.

Clean banking initiatives, PSD recapitalisation

Kumar implemented initiatives to clean up the banking sector — with decisive action against illicit financial practices, strengthening regulatory oversight of cooperative banks, and enforcing accountability in high-profile default cases. For loans of Rs 50 crore and above, passport details were made mandatory to prevent large borrowers from fleeing before action could be taken. Fraud checks, specialised monitoring above Rs 250 crore, and IT-based risk scoring on 34-plus factors replaced soft signals with loose controls, inbuilt in lending by large consortiums of often more up to 25 banks.

A total reset of the creditor-debtor relationship with a loud and clear message that money has to be lent prudentially and debtors must pay back.

A key pillar of this transformation was the recapitalisation of public sector banks (PSBs), involving capital infusion exceeding Rs 3 lakh crore, which helped restore solvency and lending capacity. This was complemented by a far-reaching consolidation exercise, under which 27 public sector banks were merged into 12 stronger entities, alongside rationalisation of Regional Rural Banks into a more efficient one state — one RRB structure. He spearheaded the consolidation of these PSBs.