SEBI’s has begun a review of the HDFC Bank episode, with the focus initially on disclosure hygiene and could widen into a broader governance probe if the resignation of former chairman Atanu Chakraborty points to deeper concerns, sources said.
“The examination is to verify the claims made in the resignation letter and check if anything material has been left out or misreported,” a person familiar with the discussions said, adding that further action would be taken if required.
Under SEBI’s Listing Obligations and Disclosure Requirements (LODR) rules, listed entities are required to disclose such independent director resignations within prescribed timelines, along with detailed reasons and the resignation letter.
The regulator’s action follows Chakraborty’s resignation last week citing “certain happenings and practices within the bank” over the last two years that were “not in congruence” with his personal values and ethics. The resignation letter triggered an 8.7 per cent fall in the stock the following day, and wiped out about ₹1.35 trillion in market value over three sessions.
“This begins as a disclosure matter under LODR… but can shift to an accountability review if non-compliance or ethical lapses surface,” said Alay Razvi, managing partner at Accord Juris.
The immediate regulatory focus is expected to be on whether the bank’s stock exchange filings fully and accurately reflect internal board discussions. “SEBI is essentially examining whether what reached the market accurately reflects what transpired inside the institution,” said Ankit Rajgarhia, designate partner at Bahuguna Law Associates.
If discrepancies are found, SEBI can call for board and committee minutes, internal correspondence, audit reports and written explanations from the company, its management and directors. It may also summon individuals and seek records under Sections 11 and 11C of the SEBI Act.
“The intent to examine board minutes signals it is widening into a full corporate governance review, not stopping at disclosure compliance,” said Diviay Chadha, partner at Singhania & Co.
Without commenting on specific cases, SEBI Chairman Tuhin Kanta Pandey at a recent press meet said, “No one can make insinuations without proper evidence being recorded… Independent directors have to be responsible in terms of what they say,” he said.
The Reserve Bank of India said it had found “no material concerns on record” regarding the bank’s conduct or governance. Emailed queries to SEBI and HDFC Bank remained unanswered.
An independent director must raise concerns of ethics or governance within the board, ensure they are recorded in minutes and escalate to committees before resignation. “The company must thoroughly deliberate on such concerns, minute the objections and take remedial measures,” said Supriya Majumdar, partner at Elarra Law Offices.
If unresolved, escalation through whistleblower mechanisms or resignation with recorded reasons may follow, said B. Shravanth Shanker, managing partner at B. Shanker Advocates LLP.
The direction of SEBI’s review will depend on whether disclosures are found to be complete and whether the resignation points to a larger governance issue.
* SEBI’s preliminary review to focus on disclosure adequacy
* Checking for omissions, misreporting in filings under LODR
* Board conduct, fiduciary duties under scrutiny
* Probe may widen into governance review
* RBI finds no material concerns on record
Published on March 26, 2026
