HDFC Bank has named ICICI group veteran Anup Bagchi as its next managing director and chief executive, turning to an outsider for the first time in its history as the country’s largest private lender works through a period of leadership upheaval and weaker profitability.

The Reserve Bank of India (RBI) approved Bagchi’s appointment for three years from 27 October 2026, HDFC Bank said on Thursday, 1 October. He will succeed Sashidhar Jagdishan, whose second three-year term ends on 26 October.

Bagchi, 55, is currently managing director and chief executive of ICICI Prudential Life Insurance and has spent more than three decades within the ICICI group. His selection breaks with HDFC Bank’s long practice of promoting its chief executives from within.

The bank had submitted two candidates to the RBI, Bagchi and deputy managing director Kaizad Bharucha, as part of the succession process. Indian banking rules require lenders to send at least two names to the central bank for the top job.

HDFC Bank also appointed Bagchi as an additional director from Friday, 2 October, pending shareholder approval. The RBI has approved both his appointment and remuneration under the Banking Regulation Act.

An ICICI veteran crosses over

Bagchi joined the ICICI group in 1992 and has worked across treasury, retail banking, wholesale banking, investment banking, capital markets and digital financial services.

He served as managing director and CEO of ICICI Securities for six years and later became an executive director of ICICI Bank. Between 2017 and 2023, he oversaw retail, business and rural banking at the lender before moving to ICICI Prudential Life Insurance as managing director and CEO in June 2023.

That gives HDFC Bank a chief executive with experience spanning lending, capital markets and insurance at a time when it is still adjusting to the scale and balance-sheet changes brought by its 2023 merger with mortgage lender HDFC Ltd.

The combination created a much larger bank but also altered its funding mix. HDFC Ltd relied more heavily on wholesale funding, while the bank has had to increase deposits to support the enlarged loan book.

HDFC Bank’s deposits rose 14.4% in the year to March 2026 to ₹31.05 trillion, while advances increased 12.1% to ₹29.37 trillion. Profit after tax rose 10.9% to ₹74,671 crore.

But profitability metrics have come under pressure. Net interest margin was 3.34% in FY26, while current and savings account deposits accounted for 34.1% of total deposits at the end of March. The bank said the merger had reduced margins because HDFC Ltd brought a lower-yielding asset mix and a higher cost of funds.

The pressure persisted into the June quarter. HDFC Bank reported net interest margin of 3.26% on total assets, while net interest income rose 6.7% from a year earlier to ₹33,530 crore.

Jagdishan departure accelerated succession

Jagdishan announced in August that he would not seek another term, forcing the bank to accelerate a succession process that investors had until then expected to result in his continuation.

He took charge in 2020 from Aditya Puri, who had led HDFC Bank for 26 years and built it into one of India’s dominant private-sector lenders.

The latest transition also follows an unsettled period at board level.

Chairman Atanu Chakraborty resigned in March, saying certain practices at the bank conflicted with his “personal values and ethics.” An independent legal review subsequently found no evidence supporting the governance concerns raised around his departure, Reuters reported.

Former finance secretary Rajiv Kumar was later named part-time chairman.

The lender is under pressure to rebuild deposit growth, lift margins and show that the merged institution can produce stronger returns without taking excessive balance-sheet risk.

Net profit growth slowed to 5% year on year in the June quarter to ₹19,060 crore, while HDFC Bank’s net interest margin of 3.26% compared with 4.36% at ICICI Bank.

Investors initially welcomed the succession decision. HDFC Bank’s US-listed shares rose nearly 5% after the appointment was announced.