The abrupt resignation of Atanu Chakraborty as chair of HDFC Bank has exposed deep tensions with CEO Sashidhar Jagdishan, according to multiple sources familiar with the matter. Chakraborty quit last week citing "ethical differences" in a bombshell letter that rattled investors and raised questions about the bank's stability.

Sources say the power struggle centered on Chakraborty's opposition to extending Jagdishan's term, which is up for renewal. The 61-year-old CEO, who succeeded India's longest-serving private bank chief Aditya Puri in 2020, faced resistance from the former finance ministry bureaucrat who brought government connections and a hands-on approach to the non-executive role. Their conflict extended to strategic decisions, including Chakraborty's blocking of a potential Mitsubishi UFJ Financial Group investment in HDB Financial Services.

HDFC has struggled to explain the high-profile departure, first fumbling an investor call and then appointing veteran board member Keki Mistry as interim chair. The Reserve Bank of India quickly approved the transition, but shareholders remain unsettled by the lack of transparency. "It's a crazy kind of situation," said one investor, noting the bank cannot or will not explain why its chair resigned. The episode highlights governance challenges at India's second-largest private lender as it navigates leadership transitions and regulatory pressures.