HDFC Bank Q4 FY26: Advances up 12%, chairman quits

Why this quarter drew outsized attention

HDFC Bank reported steady balance sheet growth for the March 2026 quarter, with double-digit expansion in both advances and deposits. Under normal circumstances, that kind of operating momentum would anchor the market narrative. But the quarter was quickly overshadowed by an unusual governance development: the mid-term resignation of part-time chairman Atanu Chakraborty. His exit, and the language used in his resignation letter, shifted the discussion from growth to oversight, boardroom stability, and investor confidence.

A banking analyst captured the issue succinctly, saying the numbers were solid but governance concerns often carry more weight for financial institutions. The episode comes at a sensitive time for the lender, which is still working through the operational and balance sheet consequences of the HDFC Ltd merger.

March 2026 quarter numbers: credit and deposits stayed strong

The bank reported total advances of ₹29.6 lakh crore in the March 2026 quarter, a 12% year-on-year rise. Total deposits increased 14.4% year-on-year to ₹31.05 lakh crore. The deposit growth outpacing credit growth was highlighted by a sector expert as a positive signal for liquidity and balance sheet strength.

These metrics matter because competitive deposit mobilisation has become central to protecting margins across the banking sector. For HDFC Bank specifically, stronger deposit traction has been closely watched after the merger altered its balance sheet mix.

Deposit mix: CASA and time deposits both expanded

Within deposits, CASA stood at ₹10.6 lakh crore, up 12.3% year-on-year. Time deposits were ₹20.45 lakh crore, up 15.5% year-on-year. The mix indicates the bank continued to add deposits across segments, with time deposits growing faster than CASA in the reported period.

While the quarter’s headline growth was healthy, market participants focused on whether the bank can sustain deposit momentum amid intense competition for liabilities.

The governance trigger: a rare mid-term chairman resignation

Atanu Chakraborty resigned mid-term, with his resignation formally received by the bank on March 18, 2026, and taking immediate effect. It was described as the first mid-term resignation of a part-time chairman in the bank’s history. In his resignation letter, Chakraborty cited ethical concerns, writing that “certain happenings and practices within the bank… are not in congruence with my personal values and ethics.”

The wording mattered because it did not point to routine reasons such as health or time constraints. It also did not provide detailed allegations in the public record, leaving investors to assess the implications primarily through the governance lens.

What traders reacted to: uncertainty, not the quarter’s growth

Even with double-digit growth in advances and deposits, the market conversation pivoted quickly. The resignation sparked a governance debate, and the bank’s stock fell 12% over three days after the exit, according to the Reuters account in the provided text. Separately, the episode was described as contributing to a $16 billion market-cap erosion in India’s biggest private lender.

The stock also hit a 52-week low of ₹772 on March 19, 2026, as per the details provided. The price action underscored how leadership surprises can dominate near-term sentiment in banking, where confidence and oversight are central to valuation.

RBI and board response: reassurance and interim continuity

Hours after the resignation became public, the Reserve Bank of India issued a statement saying there were “no material issues on record” regarding the bank’s conduct or governance. The regulator also said the bank remained well-capitalised and financially sound, supported by a professional board and competent management.

To ensure continuity, the RBI approved Keki Mistry as interim part-time chairman for three months starting March 19, 2026. This interim arrangement was presented as a stabilising step while the bank and board manage the transition.

Post-merger context: scrutiny rose after July 2023 integration

The development lands in the post-merger phase following the merger of HDFC Ltd with HDFC Bank, effective July 1, 2023. The merger created a larger institution with a balance sheet exceeding ₹18 lakh crore, raising expectations around governance clarity, integration discipline, and board oversight.

The Reuters portion of the provided text also linked some of the bank’s current financial pressures to merger mechanics. It noted the bank’s lending margin had dipped to 3.35% from 4.1% before the merger and that the loan-to-deposit ratio rose to around 110% post-merger from 86% to 87% prior to it. It also stated that the merger added assets of ₹7.23 lakh crore.

Reports of internal rifts and steps announced by the bank

Reuters cited nine people including board members and current and former staff who said the bank had struggled with internal rifts in recent years, including between Chakraborty and CEO Sashidhar Jagdishan, with differences described around strategy and human resources policies. The same text also said the bank’s management and India’s banking regulator denied any governance or financial problems.

After the selloff, the bank said it had appointed external law firms to review the claims, according to the Reuters account. Chakraborty, when asked by Reuters about whether differences were raised at the board level, responded that there is a structure for handling governance and accountability issues and that matters needing finality are placed before the board.

Leadership watch: CEO term, succession process, and senior exits

CEO Sashidhar Jagdishan’s term ends in October 2026 unless extended. Separately, interim chairman Keki Mistry said the Nomination and Remuneration Committee would meet within about a month to consider leadership recommendations, including CEO succession, and that he was unlikely to continue as chairman beyond the three months ending in June 2026.

The supplied text also described multiple senior-level exits over the past two years and reported that Executive Director Bhavesh Zaveri is expected to exit in April 2026. This cluster of transitions has kept investor attention on leadership depth and continuity during a critical integration period.

What matters next for investors and the market

From the facts in the public record, the key near-term variables are governance clarity and leadership continuity. Investors will watch for the appointment process for a new chairman, the board and management’s response to the governance concerns raised in the resignation letter, and any further regulatory or board-level clarifications.

Operationally, the March quarter data shows business momentum in advances and deposits. But for banks of HDFC Bank’s scale, confidence can be more sensitive to governance signals than to a single quarter of growth.

Conclusion

HDFC Bank’s March 2026 quarter numbers showed steady expansion in advances and deposits, reinforcing operating strength. Yet Atanu Chakraborty’s abrupt mid-term resignation, citing ethical concerns, moved governance to the centre of the investment debate. With an interim chairman in place until June 2026 and the CEO’s term running to October 2026, markets are likely to stay focused on board processes, disclosures, and leadership decisions already scheduled in the coming months.