The bank said its board, at a meeting on Saturday, took note of Jagdishan's decision. "Despite persuasion, Jagdishan reiterated his decision to not seek reappointment," it said.

Jagdishan will retire from the bank's services at the close of business hours on October 26. He took charge as managing director and CEO on October 27, 2020, succeeding Aditya Puri.

The board credited Jagdishan with his leadership and contribution to the bank's growth and stability, as well as his role in completing the landmark merger of HDFC Bank with mortgage lender HDFC.

The bank said it would "fast-track" the selection and appointment of Jagdishan's successor well ahead of his retirement.

Leadership turbulence

Jagdishan's decision comes after a period of heightened scrutiny of the bank's senior leadership and governance.

Earlier this year, HDFC Bank's part-time chairman and independent director Atanu Chakraborty resigned abruptly.

In his resignation letter, Chakraborty said certain operational practices and internal developments at the bank were not in line with his "personal values and ethics".

The resignation triggered speculation over boardroom differences, governance practices and Jagdishan's tenure.

HDFC Bank subsequently commissioned an independent legal review of the governance concerns raised by Chakraborty, which found no substantiated evidence of governance failure, according to the bank.

The RBI also backed the bank's governance framework, helping to calm concerns among investors.

The lender subsequently appointed former finance secretary Rajiv Kumar as its part-time chairman for a three-year term after veteran executive Keki Mistry served briefly as interim chairman.

Jagdishan also faced a legal challenge related to an FIR filed in connection with the Lilavati Kirtilal Mehta Medical Trust, which the Bombay High Court quashed.

Jagdishan's impending exit now puts succession at the centre of investor attention.

Analysts are likely to focus on the ability of the new CEO to maintain confidence among institutional stakeholders while steering the bank through margin recovery and extracting further synergies from the HDFC merger.