The recent exit of Atanu Chakraborty from HDFC Bank continues to cast a long shadow over India’s regulatory system. What began as a resignation has now evolved into a test of regulatory responsiveness, transparency, and credibility.

When the chairman of a systemically important bank steps down, citing “happenings and practices in the last two years not in congruence with his values and ethics”, it cannot be treated as routine. It is, by definition, a red flag on governance. Yet, even a week after the resignation on March 17, communicated on the 18th, there is still no clarity on what those “happenings and practices” actually were.

This vacuum of information is shocking. Markets function on the continuous and credible flow of information. When a statement of such gravity is made without substantiation, and regulators fail to respond swiftly, uncertainty fills the gap. That uncertainty distorts prices, creates information asymmetry, triggers speculation, and creates fertile ground for vested interests to exploit the situation.

The nearly 9% intraday fall in HDFC Bank’s stock following the announcement was not an overreaction; it was the market doing what it does best: pricing risk in the absence of clarity. Over Rs 1 lakh crore in market capitalisation was wiped out in minutes not because of known facts but because of unknowns.

It is in such moments that regulators are expected to step in, not with platitudes but with precision. Against this backdrop, the recent public remarks by the SEBI chairman, following a board meeting on the 23rd, must be evaluated. His message to independent directors, that they must be mindful of their responsibilities and the implications of their........

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