Differences between boards and senior management over business priorities, strategy and the pace of transformation are emerging as a factor behind a number of chief executives at India’s private-sector banks choosing not to seek reappointment or accepting shorter terms, Business Standard reported.

The trend has raised concerns about leadership continuity and whether lenders can maintain long-term transformation programmes amid rapid changes in technology, customer behaviour, competition and risk management.

HDFC Bank (NSE: HDFCBANK) Managing Director and Chief Executive Sashidhar Jagdishan has decided not to seek a third term after his current tenure ends on October 26, 2026. South Indian Bank (NSE: SOUTHBANK) Managing Director and Chief Executive P R Seshadri and Kotak Mahindra Bank (NSE: KOTAKBANK) Managing Director and Chief Executive Ashok Vaswani have also opted not to seek reappointment when their current terms expire.

At ICICI Bank (NSE: ICICIBANK), Managing Director and Chief Executive Sandeep Bakhshi has sought a two-year reappointment rather than the three-year term generally followed by banks. The Reserve Bank of India has approved his reappointment.

Industry experts said the decisions reflect different circumstances at individual lenders and should not automatically be interpreted as evidence of serious board-management conflicts. Regulatory considerations, strategic differences and prolonged uncertainty around appointments can all influence CEO decisions.

However, growing divergence between boards and executives over strategic direction could become a governance concern, particularly as banks face pressure to modernise technology, strengthen risk controls and invest for future growth, Business Standard added.

Experts also warned that lengthy CEO appointment processes can create uncertainty for management teams, investors and shareholders. A more predictable framework for executive appointments and succession planning could help banks maintain continuity and reduce disruption.

The issue is particularly relevant for older private-sector banks, where boards may prioritise short-term cost control at the expense of investment in technology, growth and organisational transformation. Weak oversight, excessive exposure to particular businesses and difficulties in balancing growth with asset quality could further increase risks during economic downturns.

The departure of experienced CEOs could also create a leadership gap across the sector. Industry observers believe private-sector banks have a limited pool of executives with the experience required to take over large lenders, potentially making succession a prolonged process.

A lack of alignment between boards and chief executives, inadequate support for long-term transformation and insufficient incentives could encourage capable leaders to leave rather than seek another term.

For shareholders, prolonged leadership uncertainty could delay strategic initiatives, weaken succession planning and potentially affect long-term value creation. The developments have therefore placed greater focus on board effectiveness, CEO succession and the need for clearer alignment between governance structures and banks’ long-term objectives.