HDFC Bank Wipes Out ₹1 Lakh Cr Market Cap in 8% Slide; Dragging Bank Nifty Below Key Support Levels

India’s financial stocks faced a brutal sell-off on Thursday morning, with the Nifty Bank index plunging over 3% within the first hour of trade. The catalyst was the shock resignation of HDFC Bank’s part-time chairman, Atanu Chakraborty, who cited a fundamental mismatch between the bank's internal practices and his personal values and ethics.

As of 10:24 AM IST, the Nifty Bank index was reeling at 49,842.10, down 1,644 points or 3.19%. The benchmark Nifty 50 followed, dropping 2.44% as the banking heavyweight dragged the broader market into the red.

HDFC Bank, the cornerstone of the Indian banking sector with a nearly 30% weightage in the Bank Nifty, saw its shares crash 8.12% to ₹776.35 at the opening bell. The stock’s ADRs (American Depository Receipts) had already tumbled nearly 8% overnight in New York, setting a grim tone for the domestic session.

Chakraborty’s departure, effective immediately from March 18, 2026, has introduced a governance discount that investors were not prepared for. While the Reserve Bank of India moved quickly to approve veteran Keki Mistry as interim part-time chairman for a three-month term to ensure stability, the markets remained spooked by the specific mention of ethics in the resignation letter.

Picture credits: NSE

Banking Sector Performance

The contagion was visible across all 12 constituents of the Bank Nifty, with major private and public sector lenders witnessing synchronized falls:

• HDFC Bank remained the primary drag, trading at ₹810.70, down 4.10% after recovering slightly from its morning lows.
• ICICI Bank faced intense selling pressure, dropping 4.23% to trade at ₹1,234.20.
• State Bank of India (SBI), the public sector bellwether, fell 4.09% to ₹1,021.15.
• Axis Bank and Kotak Mahindra Bank mirrored the trend, sliding 4.02% to ₹1,202.80 and 4.04% to ₹358.10, respectively.
• IndusInd Bank rounded out the major losers, down 3.85% at ₹1,345.50.

Picture credits: NSE

The language used by Chakraborty is exceedingly rare for the leadership of India's largest private lender. The values and ethics mismatch has overshadowed the technical stability provided by Keki Mistry’s interim appointment.

Adding to the domestic leadership crisis is a deteriorating global macro environment. Brent Crude is currently trading at $111.36, a level that increases inflationary pressure on the Indian economy and reinforces the Federal Reserve’s higher-for-longer interest rate narrative. FIIs, already net sellers of ₹2,714 crore in the previous session, are expected to intensify their exit from Indian financials following this governance shock.

Also read: HDFC Bank Chairman Atanu Chakraborty Quits Over 'Values And Ethics'