New Delhi: The board of HDFC Bank on Monday appointed former Finance Secretary Rajiv Kumar as its new chairman, who had been instrumental in revitalising public sector banking and the financial sector.Kumar, who later served as the 25th Chief Election Commissioner of India, is also credited with setting a world record for overseeing the 2024 General Election, where the largest number of voters participated.
He would replace Atanu Chakraborty, who abruptly resigned citing ethical concerns in March.
The board approved the appointment of Rajiv Kumar as an Independent Director of the bank for a period of 4 years, with effect from June 30, 2026, HDFC Bank said in a regulatory filing.
It also cleared, subject to the approval of the Reserve Bank of India (RBI), the appointment, including remuneration of Kumar as a Part-time Chairman of the bank for a period of 3 years, effective from the date as approved by the central bank, it said.
As Secretary, Department of Financial Services (2017-2020), Kumar assumed charge at a time when public sector banks were grappling with high levels of unrecognised NPAs, capital inadequacy, equity and debt being diverted, governance challenges, including large consortiums, NBFCs struggling to fill micro credit gaps post demonetisation, ponzy schemes sucking poor’s little savings, etc, the bank said in his profile.
Within a fortnight of Kumar’s joining the Department of Financial Services, accounts of about 3.38 lakh shell companies were frozen, hitting at the architecture of black money itself. Curbs on ponzy schemes followed by getting the Banning of Unregulated Deposit Schemes Act, 2019, passed, it said.
Through decisive policy direction and execution, Kumar led a comprehensive clean-up of bank balance sheets by mandating transparent recognition and provisioning of NPAs and by enforcing accountability among borrowers under the Insolvency and Bankruptcy Code framework, it said.
“His approach addressed the long-standing twin balance sheet problem by restoring credit discipline and rebooting the creditor-debtor relationship. These efforts, structured around the ‘4R strategy’ of Recognition, Resolution, Recapitalisation, and Reforms, enabled a sharp turnaround in the banking sector, with public sector banks returning to sustained profitability and improved asset quality,” it said.
His tenure saw decisive action against illicit financial practices, strengthening regulatory oversight of cooperative banks, and enforcing accountability in high-profile default cases. For loans of Rs 50 crore and above, passport details became mandatory, closing the door on big borrowers who might flee before action caught up, it added.
“Fraud checks, specialised monitoring above Rs 250 crore, and IT-based risk scoring on 34-plus factors replaced soft signals with loose controls, built into lending by large consortiums of often more than 25 banks. Opacity, suddenly, carried a cost. A total reset of the Creditor-Debtor relationship with a loud and clear message that money has to be lent prudentially and debtors must pay back,” it added.
A key pillar of this transformation was the unprecedented recapitalisation of public sector banks, involving capital infusion exceeding Rs 3 lakh crore, which helped restore solvency and lending capacity, the lender noted.
This was complemented by a far-reaching consolidation exercise, under which 27 public sector banks were merged into 12 stronger entities, alongside rationalisation of Regional Rural Banks into a more efficient one-state, one RRB structure. These measures significantly improved operational efficiency, scale, and competitiveness across the public banking system, according to the bank.
Kumar, who was appointed the Finance Secretary in July 2019, also strengthened governance, risk management, and regulatory oversight across banks by institutionalising specialised monitoring for large exposures and implementing technology-driven risk assessment systems.
He placed equal emphasis on depositor protection and financial stability, including enhancing deposit insurance coverage from Rs 1 lakh to Rs 5 lakh.
Beyond balance sheet repair, Kumar drove growth-oriented and inclusion-focused initiatives within the financial system.
HDFC Bank also disclosed that Kumar is not related to any other directors or key managerial personnel of the bank.
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