HDFC Bank share price gains 4% as RBI asks lender to pick new CEO on priority

HDFC Bank share price closed 4% higher after the Reserve Bank of India (RBI) asked the country's top private lender to make key board appointment only after new chief executive officer takes charge this year. Share price of HDFC Bank closed 3.98% or 35 points higher at Rs 924 compared to the previous close of Rs 888.95 on BSE.

HDFC Bank share price opened with a gain of 2.49% at Rs 911.10 and later touched an intraday high of Rs 930, rising 4.63% on BSE. Its market capitalisation rose to Rs 5.06 lakh crore. HDFC Bank stock has gained 11% in one week. HDFC Bank stock price trades higher than 5-day moving averages but lower than 20, 50, 100 and 200-day moving averages.

The large cap stock has lost 27.32% since the beginning of this year and 19% during the last one year. HDFC Bank on November 28, 2019, intimated RBI about the appointment of Sashidhar Jagdishan and Bhavesh Zaveri as additional director and executive director (whole-time director), subject to the RBI and shareholders' approval.

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"A communication dated April 7, 2020, from Reserve Bank of India stating that since these are important positions in the Bank, the Bank is advised to examine and submit the proposal after a new MD and CEO assumes charge later this year," HDFC Bank informed the stock exchanges.

HDFC Bank said it would accordingly ensure compliance with the Reserve Bank's instruction. Jagdishan and Zaveri would continue as additional directors on the HDFC Bank Board till the ensuing Annual General Meeting, the bank added.

On January 23, the bank said  it has chosen global executive search firm Egon Zehnder to identify a successor to managing director Aditya Puri. "Egon Zehnder has been recommended by the search committee and unanimously appointed by the bank's board," Neeraj Jha, a spokesman for HDFC Bank, said in an email.

Puri, whose term comes to an end in October this year, is also an adviser to the search committee.

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By Aseem Thapliyal