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HDFC Bank shares plunge in worst day since Covid crash after chairman quits citing ethical concerns
Foreign institutional investors hold over 47 per cent in HDFC Bank, making it one of the most widely held Indian stocks among global funds, including sovereign investors
- PUBLISHED: Thu 19 Mar 2026, 6:00 PM
Shares of India’s largest private sector lender, HDFC Bank, tumbled sharply on Thursday, marking their worst session since the Covid-era crash, after its part-time chairman Atanu Chakraborty resigned abruptly, citing concerns over internal practices and ethics.
The stock fell about 9 per cent in early trade, wiping out nearly $12billion (approximately Dh40 billion) in market value within minutes of the opening bell. By late morning, it was trading around Rs804.50 (about Dh32), after hitting an intraday low of Rs770.
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The sharp fall comes as the bank faces renewed scrutiny following Chakraborty’s sudden exit on Wednesday.
In his March 17 resignation letter seen by Khaleej Times, Chakraborty pointed to governance concerns within the bank.
“Certain happenings and practices within the bank, that I have observed over the last two years, are not in congruence with my personal values and ethics,” he wrote.
“I confirm that there are no other material reasons for my resignation other than those stated above.”
He added that while his tenure saw “momentous events” such as the merger with HDFC Ltd , which created one of India’s largest financial conglomerates, “the benefits of merger are yet to fully fructify.”
Despite the concerns, Chakraborty thanked the board and management for their support during his tenure.
The resignation rattled investor sentiment, with analysts warning of near-term pressure on the stock.
US-listed American Depositary Receipts (ADRs) of HDFC Bank had already dropped more than 7 per cent overnight. Brokerage firm JPMorgan maintained a “neutral” rating, cautioning that the stock could remain weak amid governance concerns and a softer macro backdrop.
Market experts also flagged the risk of continued selling pressure until clarity emerges on the issues raised.
Foreign institutional investors hold over 47 per cent in HDFC Bank, making it one of the most widely held Indian stocks among global funds, including sovereign investors.
In a regulatory filing, HDFC Bank said there were no additional reasons for the resignation beyond those stated in the letter. Khaleej Times has reached out to the bank for comment; a response was awaited at the time of publication.
Interim chairman Keki Mistry, appointed for three months with approval from the Reserve Bank of India (RBI), said Chakraborty had not provided detailed evidence to support the concerns raised. He added that the management continues to function cohesively.
The RBI sought to reassure markets, stating that HDFC Bank remains a “Domestic Systemically Important Bank with sound financials” and that there are “no material concerns on record” regarding its governance.
The latest developments come against the backdrop of regulatory action in the UAE.
As previously reported by Khaleej Times, the Dubai Financial Services Authority (DFSA) barred HDFC Bank’s DIFC branch from onboarding new clients in September 2025.
The restriction followed concerns linked to the alleged sale of high-risk Credit Suisse AT1 bonds to retail investors in the UAE, with claims that some clients were misclassified as “professional investors.”