Gujarat cadre to HDFC: When bureaucratic style hits corporate walls

By Rajiv Shah 

I was a little amused by the abrupt March 17, 2026 resignation of Atanu Chakraborty—a Gujarat cadre IAS officer of the 1985 batch who retired from the government in 2020—as chairman of HDFC Bank. Much of what may have led to his decision to quit this ostensibly high post—actually a non-executive, part-time role—is by now well known. I followed most of it online with considerable interest, partly because I had interacted with him umpteen times during my stint as The Times of India correspondent in Gandhinagar from 1997 to 2012.

The untimely resignation (his term was to end a year later) undoubtedly triggered a wave of speculation, market anxiety, and carefully calibrated institutional responses. At the centre of the controversy is a brief resignation letter in which Chakraborty cited “values and ethics” as the reason for stepping down, without offering any specifics. This deliberate ambiguity shaped the discourse around his departure.

Reports portrayed him as a “non-playing captain”—a non-executive chairman expected to provide oversight rather than intervene in day-to-day functioning. They suggested tensions may have arisen from a mismatch between the formal limits of his role and the manner in which it was exercised. Sources indicated that he may have bypassed the top management team by directly approaching bank branches on loan-related matters, leading to friction with the executive leadership.

The overall impression was clear: Chakraborty had become “increasingly involved” in operational matters, including strategic decisions and senior-level appointments—areas typically beyond the remit of a non-executive chairman. Yet, in his resignation letter, he framed his exit differently, stating that “certain happenings and practices within the bank, that I have observed over the last two years, are not in congruence with my personal values and ethics.”

The resignation quickly took on an emotional tone in the market. HDFC Bank’s shares fell sharply—by about 8.5 per cent—erasing nearly ₹1 lakh crore in market capitalisation in a single session. The Reserve Bank of India (RBI), reportedly uncomfortable with the situation, took the unusual step of issuing a public reassurance that the bank remained financially sound, professionally managed, and free of any material governance concerns, even as it underscored the importance of maintaining clear boundaries between board oversight and executive management.

Despite the downturn, brokerage firm Motilal Oswal retained a ‘Buy’ rating on HDFC Bank, setting a target price of ₹1,100—implying a potential upside of around 38 per cent. It cited the appointment of Keki Mistry as interim chairman and the submission of Sashidhar Jagdishan’s name for another term as CEO as reasons for optimism. Another brokerage, Jefferies, described the correction as a buying opportunity and projected an upside of about 47 per cent.

Following his retirement from the IAS after holding a senior position in the Union finance ministry as Economic Affairs Secretary, many wondered why Chakraborty chose a non-executive role in a private bank. A former colleague suggested that the move reflected a broader pattern in India’s higher bureaucracy, where many senior IAS officers, failing to get job in the government, take up post-retirement positions in the private sector.

Such transitions often allow former officials to retain elements of the influence and lifestyle associated with top government positions—ranging from access to elite networks and decision-making circles to material privileges such as spacious residences, staff support, chauffeur-driven vehicles, and participation in high-profile corporate and policy events. In corporate roles, they are also seen as being well placed to liaise with the government, given their familiarity with bureaucratic networks—even if they may not possess deep business expertise. This partly explains why major corporates, including groups like Reliance and Adani, have hired retired IAS officers.

Gujarat tenure

If I recall correctly, I first met Chakraborty in the late 1990s when he was heading the Gujarat Infrastructure Development Board (GIDB) during Keshubhai Patel’s tenure as chief minister. At the time, he was closely involved in preparing the “Gujarat Infrastructure Agenda – Vision 2010” with Crisil as consultant, and would regularly brief me on its proposals for expanding private participation in infrastructure development.

Prepared by Crisil, the multi-volume document—copies of which he shared with me ahead of wider circulation—served as a key background source for reporting on the state government’s efforts to attract corporate investment. It mapped out opportunities across sectors such as ports, roads, power, oil and gas, urban development, and water resources, detailing the strengths and constraints of proposed projects.

Envisaging investments of ₹1.17 lakh crore, the document implicitly acknowledged the state government’s limited capacity to fund infrastructure on its own—hence the emphasis on private participation to the tune of 74 percent. A decade later, however, a new document titled “Blueprint for Infrastructure: Gujarat 2020,” prepared under the chief minister’s office, ended up reiterating several of the same projects, raising questions about implementation gaps.

Chakraborty continued to articulate pro-corporate ideas in subsequent roles with the government, including proposals to privatise water distribution and to relax prohibition laws to boost tourism industry and coastal investment. Many of these suggestions, however, were widely viewed as impractical.

Observers often described his pro-corporate orientation as more academic than operational. His tenure as managing director of Gujarat State Fertilizers and Chemicals (GSFC) Ltd is sometimes cited in this context. In 2013, GSFC faced allegations from the Union Ministry of Chemicals and Fertilizers over the non-passing of subsidies to farmers amounting to around ₹600 crore, which the ministry argued undermined the purpose of government support.

The ministry sought substantial recovery, raising concerns about compliance and governance practices at the time. Given that GSFC’s net profit stood at ₹459.66 crore as of December 31, 2012 (down from ₹527.23 crore the previous year), any such repayment would have significantly impacted its financial position.

Around the same period, Chakraborty oversaw an overseas investment in Canada-based Karnalyte Resources Inc., aimed at securing long-term potash supply. A later assessment by a former GSFC managing director, A.K. Luke—also an IAS officer—reportedly concluded that the ₹250 crore investment was effectively written off. The project envisaged annual supplies of 350,000 tonnes of potash, rising to 600,000 tonnes, from Karnalyte’s Wynyard Carnallite project over 20 years. However, no supplies materialised, and the investment lost value over time.

Transferred to Delhi in 2016, a move some linked to the broader trend of bureaucrats seeking proximity to the central leadership after 2014, Chakraborty initially held positions that were not considered central to policy-making. He served as Director General of Hydrocarbons (DGH) and later, between 2017 and 2019, as Secretary, Department of Investment and Public Asset Management (DIPAM). A bureaucratic reshuffle in 2019 elevated him to Secretary, Department of Economic Affairs (DEA), though his tenure there lasted less than a year, until his retirement in April 2020.

Post-retirement, there was speculation in Gandhinagar that he might be appointed chairman of the Gujarat International Finance Tec-City (GIFT City), a flagship project. That did not materialise. There was also talk of a possible appointment as SEBI chairman, which likewise did not happen. Eventually, he took up the role of non-executive chairman at HDFC Bank—a position with limited involvement in day-to-day operations, something that may not always sit comfortably with career bureaucrats accustomed to wielding executive authority.