InvestorQ : What is the succession plan at HDFC Bank and what does that hold for the future of the stock?
Khushi Patel made post

What is the succession plan at HDFC Bank and what does that hold for the future of the stock?

Answer
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Anjana Aiyar answered.
8 months ago


HDFC Bank has already announce that it will retain global executive search firm, Egon Zehnder, to find a successor to managing director Aditya Puri. The internal search committee was not been able to reach a consensus on selecting a successor to Puri who has been at the helm of HDFC Bank since its inception in 1994. As per extant regulations, HDFC Bank will need approval from the Reserve Bank of India (RBI), before the new appointment can be confirmed. Egon had also helped Axis Bank find the new CEO in place of Shikha Sharma.

Apparently, there are also difference of opinion between Puri and Deepak Parekh of HDFC. While Puri preferred internal candidates like Bhavesh Zaveri, Parekh has preferred to reinstate Paresh Sukhtankar, who had resigned in 2018. Puri ran the bank with tight controls on bad loans, although credit quality is generally attributed to Sukthankar. While Puri is seeking another term, the RBI has been firm that chief executives of private banks must retire at the age of 70. The large word may not have been said and Egon may have a tough job on hand. But sooner the succession issue is sorted, the better it would be for the long term health of the bank.