HDFC Bank's New CEO Anup Bagchi to Tackle Leadership Crisis and Recapitalise Brand

Mumbai/New Delhi: In a surprise move, HDFC Bank's new CEO Anup Bagchi has received a call from the bank's chairman Rajiv Kumar and nomination and remuneration committee chair Harsh Bhanwala. This marked a significant development in the bank's leadership crisis.

The trio discussed the financial sector's developments and other issues before Bagchi received a surprise offer from HDFC Bank. With the two directors informing him about a reference check having already been done with colleagues, peers, and regulators.

As the HDFC BankIt was additional director, Bagchi has established a clear chain of command, requiring his long-time colleague and boss, Sandeep Bakhshi, to be the first to know about any new developments. Following a two-week period of high-stakes negotiations, a video conference was convened between the HDFC Bank board and Bagchi.

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This was later shared with the RBI on August 12. Meanwhile, Kumar was working to secure necessary clearances in the lead-up to Sashi's planned departure on October 26, with deputy MD Kaizad Bahrucha playing a key role in the process.

Under Bagchi's stewardship, HDFC Bank has avoided regulatory entanglements, a shows his tenure as chairman. A seasoned administrator, Bagchi had previously served on key panels at RBI and Sebi, drawing on his experience to navigate the country's financial landscape.

In 2017, he played a key role in stabilizing India's public sector banking sector, and just six months later, he took the reins at HDFC Bank on June 29. His assessment of the bank's health was cautious, highlighting six pressing concerns, including leadership fragmentation and bond mis-selling in the UAE.

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Bagchi's immediate priorities are to recapitalise the brand and strengthen the leadership bench. Many seniors are set to retire, and the "command culture" has resulted in the creation of satraps for each division. The 55-year-old has the task of breaking silos and putting the institution before individual ambition.

He will also have to optimise the balance sheet by cutting high-cost liabilities. Shedding assets to bring down the credit-deposit ratio, which stubbornly remains in the high 90s three years after the merger.

Technology and customer service are another area of focus. Bagchi also faces the delicate task of balancing HDFC Bank's aggressive insurance-sales culture with Irdai's tighter distribution rules. Meanwhile, retaining protection as an embedded offering for less-aware customers.