The announcement on Saturday ends speculation about an extension for Jagdishan, who has spent three decades at the bank. The board can choose a successor from within or outside the organisation, but the appointment will need regulatory approval. No successor has been named in the report.

Jagdishan succeeded Aditya Puri in 2020 and led the bank through its 2023 merger with Housing Development Finance Corp. That transaction brought a substantial portfolio of long-duration housing loans, putting pressure on liquidity and margins. HDFC Bank shares have dropped 27% this year, while the Nifty Bank Index has declined 3.5%.

Governance questions have added to the uncertainty. A Dubai regulator stopped the bank’s branch there from taking new customers last year over process shortcomings. Chairman Atanu Chakraborty resigned in March over ethical differences and later linked his exit partly to the handling of those regulatory concerns. HDFC Bank denies wrongdoing, and the RBI has publicly said it sees no governance problems.

Separately, the board took disciplinary action against three senior executives, including Jagdishan, in July over employees exceeding acceptable limits while setting deposit rates. IIFL Capital’s Rikin Shah said the CEO’s departure removes the risk of a shorter RBI-approved extension and suggested an external appointment could offer a fresh start.