HDFC Bank and Kotak Mahindra Bank are central to these concerns. HDFC Bank announced that Sashidhar Jagdishan would not seek a further term, with only two months remaining in his current tenure. At Kotak, Ashok Vaswani plans to leave in December after three years as CEO.

The departures have unsettled market watchers because stable leadership matters for confidence in banks. Foreign investors in India’s banking industry, valued at $3.3 trillion, are pressing for better preparation. Both lenders command lower valuations than five years earlier, while experts warn that unexpected exits can weaken the extra value investors assign to bank shares.

Regulatory requirements add another layer. Boards must send proposed CEO names to the RBI at least six months ahead, but appointments depend on its approval. Some experts say this limits boards’ ability to make early commitments. A 15-year tenure ceiling and a maximum age of 70 have also prompted experienced leaders to exit.

Recruitment is becoming harder as senior bankers move to fintech businesses and non-bank lenders. These employers often offer better compensation and fewer restrictions around bonuses and share-based rewards. Tight RBI rules governing bank CEO pay make attracting and retaining leadership talent more difficult.