HDFC Bank seeks headhunter to speed up CEO search after Jagdishan exit
HDFC Bank is looking to hire an executive search firm to accelerate the process of finding its next chief executive, after incumbent Sashidhar Jagdishan decided not to seek another term. People with knowledge of the matter said the Mumbai-based lender has held talks with headhunters including Egon Zehnder, with discussions picking up pace following Saturday’s announcement.
The bank could appoint a search firm as early as this week as it works to identify candidates, the people said, asking not to be identified because the information is private. Jagdishan, a three-decade veteran of the bank, will step down on October 26, according to a stock-exchange filing. His decision ends months of speculation over whether he would seek an extension.
The new CEO will take over at a difficult moment for the lender. HDFC Bank’s shares have fallen 28 per cent this year, compared with a 4 per cent decline in the benchmark Nifty Bank Index. The board will need regulatory approval for the replacement, who could come from inside the bank or from outside.
Internal contender faces tenure constraint
Deputy Managing Director Kaizad Bharucha, who oversees retail and wholesale banking, has emerged as the strongest internal candidate, according to analysts. Bharucha has spent around three decades at the lender and has served on its board for 12 years.
However, Reserve Bank of India rules cap the continuous tenure of a CEO or whole-time director at 15 years. That means if Bharucha were selected, he might not be able to complete a full three-year term, a factor the board is likely to weigh as it considers internal and external options.
Context: Chairman's exit earlier this year
The leadership transition follows a turbulent period for the bank. In March, then-chairman Atanu Chakraborty made an acrimonious exit, citing “certain happenings and practices” at the bank that were not in line with his “personal values and ethics.” The lender appointed a successor and conducted an independent legal review, which found no evidence to substantiate Chakraborty’s allegations and pointed to inconsistencies in his statements.
HDFC Bank did not immediately reply to an email seeking comment, while Egon Zehnder declined to comment.