As HDFC Bank Ltd. prepares for its first outsider chief executive, trepidation is rippling through its senior ranks, with some bracing for the possibility of more shifts in management and power structures inside the $110 billion lender.
Some senior executives had hoped to see long-time Deputy Managing Director Kaizad Bharucha get the top job, people familiar with the matter said. Instead, Anup Bagchi — a external candidate —was handed the role outright.
A lot hinges on Bagchi’s ability to pull off his new job. The stock, held by funds including those from global heavyweights like BlackRock Inc. and Vanguard, has tumbled nearly 30% this year as its chairman quit acrimoniously and its CEO later surprisingly said he wouldn’t seek a new term. The bank is classified as systemically important to the nation’s financial system. And analysts are predicting that some HDFC veterans may leave in the near term.
India is one of the world’s fastest growing economies and, as it gets increasingly interconnected to the rest of the world, behemoths from HDFC to Tata Group are grappling with a variety of complexities as they steer sprawling institutions through changes and new managers.
Bagchi headed ICICI Prudential Life Insurance Co., the life insurer backed by one of HDFC’s biggest rivals, ICICI Bank Ltd. His experience spans from retail banking and digital finance to treasury and insurance. He got the new job partly because he would have wider perspective than a long-time insider in reassessing HDFC’s operations, people familiar with the matter said.
In recent months, internal divisions in HDFC have played out publicly. Earlier this year, HDFC’s previous chairman resigned unexpectedly saying certain practices were not in “congruence with my personal values and ethics.” That sparked a rout in the lender’s shares even though the bank denied any wrongdoing and the regulator came to the bank’s defence. Outgoing CEO Sashidhar Jagdishan later surprised colleagues by deciding not to seek another term.
While Bagchi would be inclined to do things differently, he is unlikely to take steps that would shake the confidence of HDFC employees overnight, a person familiar with the matter said.
Bloomberg spoke to nearly a dozen people familiar with the bank’s operations or with Bagchi’s thinking. They asked not to be identified discussing matters that aren’t public.
HDFC said in a statement that all decisions about senior management are taken by the board or relevant committees after thorough deliberations and discussing broader management changes would be “speculative.”
“The Bank has a history of strong professionalism, and its leadership remains aligned and focused on delivering value for our customers and stakeholders,” the statement said.
One of Bagchi’s top agendas is to bring back investor confidence, people familiar with matter said. He has a challenging job ahead. Shares of HDFC Bank are down more than 29% for the year, underperforming the banking sector gauge that has shed 7.6%. The lender is currently valued at over $110 billion.
People familiar with the new CEO say Bagchi, 56, could be well suited to the position because he is strict about details and following regulations. He’s known to be approachable and has a liking for talking to colleagues face-to-face — sometimes even in the office canteen — rather than sticking to the CEO cabin, some of the people said. Colleagues sometimes call him Professor Bagchi for his love of reading and knowledge of a variety of subjects, according to people familiar with the matter.
Former colleagues also describe him as particularly resistant to internal camps, with a habit of moving between teams rather than attaching himself to particular factions.
Macquarie analyst Suresh Ganapathy said his experience across financial-services businesses and proven chief executive leadership could be particularly relevant for a bank navigating a demanding transition.
Yet even if Bagchi takes a measured approach with his changes, some executives could choose to leave. “Any external candidate that gets appointed will have to deal with senior management exits, in our view,” said Ganapathy. “Our channel checks and anecdotal industry feedback suggest that there might be some attrition among long-tenured branch managers.”
Bagchi starts as CEO on Oct. 27. He will be eligible for a compensation of 359 million rupees ($3.7 million) per annum, which comprises of fixed pay and variable pay, which will vest over four years, according to an exchange filing on Wednesday.
One of the earliest questions will be the role of Bharucha, who had been the leading internal candidate for the top job.
Bharucha’s future will be an early test of how disruptive Bagchi intends to be. A three-decade veteran, he remains a key repository of institutional knowledge. Bharucha staying on could help preserve continuity; losing him could accelerate departures among executives already unsettled by the succession. Bharucha didn’t respond to a request for comment.
The new CEO takes over as recently appointed Chairman Rajiv Kumar pushes for faster post-merger growth, tighter controls and changes in management, Bloomberg News reported in September. Jagdishan resisted parts of that push, helping set the stage for his decision not to seek another term, Bloomberg News reported at the time. HDFC Bank has denied they had such differences and that those were behind his decision.
In the immediate aftermath of the HDFC CEO appointment, two camps emerged internally with one group arguing that the bank would have stabilized more quickly under an insider. Others said Bagchi would be more effective in making changes, with some executives who joined the bank in more recent years hoping he would bring positive changes.
The HDFC statement said it would be misleading to describe internal divisions.
Some in the firm expect Bagchi to double down on a revamp that newly appointed Chairman Kumar began after taking over a few months ago, according to people familiar with the matter.
The push by the new chairman has already started to reshape the bank. The board last week named V.N. Srivatsan, a senior executive at ICICI Bank, as HDFC Bank’s next chief compliance officer.
“While the Bank has well established governance frameworks, we continue to enhance the same, as required,” HDFC said in its statement.
Technology and customer service could also be high on the agenda, people familiar with the matter said. There could also be higher investments in digital systems as well as efforts to address service shortcomings at a bank whose scale has grown sharply since the merger, the people said.
One of Bagchi’s most tangible legacies in an earlier position was ICICIdirect, an online investing platform that helped bring stockbroking and other financial products to a new generation of Indian retail investors who’ve increasingly helped turbo-charge its markets. But the domestic life insurance company he oversaw is a fraction of HDFC’s size.
Meanwhile, he will also inherit heightened regulatory scrutiny. HDFC has faced disputes over sales of Credit Suisse Additional Tier 1 bonds to overseas clients, although it has won all seven cases brought by investors in Bahrain. In September 2025, regulators also barred its Dubai branch from onboarding new customers over alleged compliance lapses. The bank has said it has taken steps to comply with the directives.
Given HDFC Bank’s size and systemic importance, the institution could remain closely watched by regulators as its leadership architecture settles, said Srinath Sridharan, a corporate advisor specializing in succession planning and governance.
“The incoming CEO will need to build a strong working relationship with a board that is itself entering a new phase, while maintaining clarity between oversight and management,” he said.