Kolkata: Within 96 hours of sudden resignation of chairman Atanu Chakraborty citing ethical concerns, HDFC Bank sacked three senior officials employees for gaps in client onboarding at its Dubai International Financial Centre (DIFC) branch, said reports. The reason for extreme step is reportedly mis-selling of Credit Suisse’s additional tier-1 (AT-1) bonds. After the incidence of misselling surfaced, Dubai Financial Services Authority prevented HDFC Bank from enlisting new customers at its DIFC branch. The incident appeared to have taken place in September 2025.
“Appropriate remedial actions have been taken in line with internal policies. Personnel changes have been undertaken along with appropriate action as per the bank’s conduct regulation,” was what the HDFC Bank told the media in response to the decision to terminate the three senior officials.
Misselling the issue
The bank also admitted that it could detect shortcomings in the client onboarding requirements in the Dubai International Financial Centre and the action was in response to that development. Misselling is frowned upon by most regulators all over the world and recently RBI has initiated strict action against misselling by banks in India.
Atanu Chakraborty’s resignation and aftermath
The sudden resignation of part-time chairman of the bank Atanu Chakraborty earlier this week, threw HDFC Bank in turmoil. Chakraborty’s resignation on the grounds of ethical concerns triggered panic among investors, who took to heavy selling of the bank’s shares. HDFC Bank is the largest private sector bank in the country and the second only to PSU behemoth SBI. The shares tumbled from Rs 842 on March 18 to Rs 781 on March 20. It also touched the 52-week low of Rs 770 in this period.
Two directors of HDFC Bank rushed to the RBI to explain the matter to the banking regulator which finally expressed satisfaction at how the bank was being run. Chakraborty’s resignation became effective on March 18. And this was the first time the chairman of quit before the end of the term citing ethical concerns, which, in other words, indicated gaps in governance standards. “Certain happenings and practices within the bank, that I have observed over last two years, are not in congruence with my personal values and ethics. This is the basis of my aforementioned decision,” Chakraborty said in his resignation letter dated March 17.
HDFC Bank new chairman, MD & CEO assure
After the panic in the market and question among sections of depositors, the new chairman of the bank Keki Mistry and the MS and CEO S Jagdishan tried to calm nerves. They said that there were no governance issues in the bank and hoped the panic will quickly end.
“As the management team and board, we stand united. The management will be speaking to all major shareholders during the next one or two days. Whatever fears are there in people’s mind will be addressed. I don’t believe that there is any governance-related issue in the bank. Getting the trust of investors back is a matter of time and I am sure people will understand,” Keki Mistry told the media. The new chairman also said that RBI has been appraised of the situation and it has not highlighted any issue that the management needs to address.