UPSC Prelims Practice Questions — HDFC Bank sends two names to RBI for next MD & CEO

Q1. Under the Banking Regulation Act, 1949, for how long at a time may the Board of directors of a banking company fix the term of office of its whole-time chairman or managing director?

  • A. A period not exceeding three years, with eligibility for re-appointment
  • B. A period not exceeding five years, with eligibility for re-appointment
  • C. A period not exceeding seven years, with eligibility for re-appointment
  • D. A period not exceeding ten years, with eligibility for re-appointment

Q2. Which one of the following correctly describes the scope of Section 35B of the Banking Regulation Act, 1949?

  • A. It bars a banking company from carrying on banking business in India without a licence granted by the Reserve Bank, which may also be cancelled by the Reserve Bank
  • B. It empowers the Reserve Bank to appoint additional directors on the board of a banking company whose affairs are being conducted against depositors' interests
  • C. It empowers the Reserve Bank to inspect a banking company and its books and to furnish a copy of the inspection report to the Central Government
  • D. It requires a banking company to obtain the Reserve Bank's prior approval for appointing, re-appointing or terminating its managing director, chief executive officer or whole-time director, and for the terms of such appointment

Q3. In September 2026, HDFC Bank's Board forwarded its recommendation for the bank's next Managing Director & CEO to the Reserve Bank of India. How many candidate names were forwarded, and for what tenure was the post proposed?

  • A. One name, along with the proposed remuneration, for a proposed tenure of three years
  • B. Two names, in order of preference with the proposed remuneration, for a proposed tenure of three years
  • C. Two names, in order of preference with the proposed remuneration, for a proposed tenure of five years
  • D. Three names, in order of preference with the proposed remuneration, for a proposed tenure of three years

Q4. The shortlist of candidates for HDFC Bank's next Managing Director & CEO, approved by the Board in September 2026 before being sent to the Reserve Bank of India, was drawn up on the recommendation of which one of the following?

  • A. The Audit Committee of the Board, which oversees financial reporting and statutory compliance
  • B. The Governance, Nomination and Remuneration Committee of the Board
  • C. The Risk Policy and Monitoring Committee of the Board, which oversees the bank's enterprise risk framework
  • D. The Customer Service and Stakeholders' Relationship Committee of the Board

Q5. The continuation of Kaizad M. Bharucha as Whole-time Director (Deputy Managing Director) of HDFC Bank for a further term from April 2026 required clearance from which one of the following?

  • A. The Securities and Exchange Board of India, which approves the key managerial personnel of every listed banking entity
  • B. The Department of Financial Services, Ministry of Finance, which clears whole-time directors of all scheduled commercial banks
  • C. The Reserve Bank of India, whose prior approval is required for appointing or re-appointing a whole-time director of a banking company
  • D. The Financial Services Institutions Bureau, which recommends whole-time directors of all scheduled commercial banks

Q6. In 2026 the Reserve Bank of India cleared Kaizad M. Bharucha's continuation as HDFC Bank's Whole-time Director (Deputy Managing Director). For how long a further period was this clearance given?

  • A. One year
  • B. Two years
  • C. Three years
  • D. Five years

Q7. With reference to the succession of chief executives at HDFC Bank, consider the following statements. Which of the above is/are NOT correct?

  1. Aditya Puri served as the bank's Managing Director for about 26 years, from 1994 to 2020.
  2. Sashidhar Jagdishan took charge as Managing Director & CEO with effect from 27 October 2020.
  3. Sashidhar Jagdishan's tenure was subsequently extended by the Reserve Bank of India by three years, running up to 26 October 2026.
  4. Sashidhar Jagdishan was brought in from outside the HDFC group, having headed another private sector bank before being chosen to succeed Aditya Puri.
  • A. 1 and 3
  • B. 2 only
  • C. 4 only
  • D. 2 and 4

Q8. Following the amalgamation of HDFC Ltd with HDFC Bank in July 2023, which one of the following relaxations was actually extended to the bank, and by which authority?

  • A. The Reserve Bank of India, allowing a three-year glide path for meeting the cash reserve ratio and the statutory liquidity ratio
  • B. The Reserve Bank of India, allowing a three-year glide path for meeting priority sector lending targets
  • C. The Securities and Exchange Board of India, allowing a three-year glide path for restoring minimum public shareholding
  • D. The National Bank for Agriculture and Rural Development, allowing a three-year glide path for rural credit deployment

Q9. With reference to the amalgamation of HDFC Ltd with HDFC Bank, consider the following statements. Which of the above is/are NOT correct?

  1. The amalgamation took effect from 1 July 2023.
  2. Under the share swap, shareholders of HDFC Ltd received 42 shares of HDFC Bank for every 25 shares held by them in HDFC Ltd.
  3. After the amalgamation, HDFC Bank came to be owned entirely by public shareholders.
  4. The total business of the merged entity crossed ₹41 trillion, making HDFC Bank the largest Indian bank by size, ahead of the State Bank of India.
  • A. 1 and 3
  • B. 2 only
  • C. 3 and 4
  • D. 4 only

Q10. Under the Reserve Bank of India's corporate governance instructions on appointment of directors issued in April 2021, which one of the following statements about the tenure of the MD & CEO of a private sector bank is correct?

  • A. An incumbent who completes the maximum permissible tenure as MD & CEO is permanently barred thereafter from the bank as well as from all its group entities
  • B. An MD & CEO who is not a promoter may continue in office without any upper age limit so long as the board re-appoints the person every five years
  • C. All MD & CEOs, whether promoters or professionals, are uniformly subject to a single maximum tenure of 12 years, with no provision for any extension
  • D. A promoter or major shareholder serving as MD & CEO may hold the post for up to 12 years, extendable to 15 years by the Reserve Bank in extraordinary circumstances