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Mumbai: The Reserve Bank of India (RBI) Thursday sought to quell speculation about governance issues at HDFC Bank after outgoing part-time chairman Atanu Chakraborty cited "values and ethics" for his exit, rattling investors.In a rare move, the regulator stepped in to assure the financial markets that "there are no material concerns on record" with regard to HDFC Bank's "conduct or governance."The markets, however, seemed to have paid little heed to the reassuring management commentary. The stock fell as much as 8.4% intraday but pared losses to slump 5.1% after the RBI issued its statement. HDFC Bank, which has about a 15% weight on the Sensex, contributed to broader declines; the Sensex ended 3.3% lower at 74,207.24.HDFC Bank is also the biggest Nifty 50 stock by weighting, accounting for about an eighth of the index.It is also the biggest bank by market value and one of the three regulator-designated systemically important lenders.During the call with analysts, the management repeatedly said it had no insight into what prompted Chakraborty to resign 14 months before the end of his second term.The surprise resignation raised questions among investors about whether this was an isolated boardroom episode or a sign of governance issues that had been suppressed for months.Most analysts sought an explanation from the bank’s management on what exactly triggered the chairman’s exit and the timing of his resignation. No clarity emerged from either the call with analysts or the media later in the day.“None of us are aware of what specific issues he had. The board met yesterday. He didn’t give any explanation as to his resignation,” said Keki Mistry, who was elevated to interim chairman from independent director for three months.Mistry tried to reassure analysts.“It is a little baffling and we will get to the root of it in due course,” Mistry said. The bank, he added, will begin the process of appointing a permanent chairman.Mistry is a veteran banker who served the mortgage lender HDFC for more than three decades.The development comes ahead of MD and CEO Sashidhar Jagdishan’s completion of his second term in October 2026. The nomination and remuneration committee (NRC) will meet within the next month to recommend the appointment of the managing director and CEO to the RBI.HDFC Bank has a market capitalisation of Rs 12.30 lakh crore and it has the second-highest deposit base after that of the State Bank of India — at Rs 28.5 lakh crore. It has largely maintained a clean governance record, and a former employee even dismissed the episode as egocentric.This episode may nonetheless require the bank to provide a more detailed explanation to the US Securities and Exchange Commission (SEC), as its American depositary receipts are listed on the New York Stock Exchange. The ADRs fell 3.3% on Thursday after a 7% drop on Wednesday.