"We will just have to wait for different political forces to find some equilibrium inside Bangladesh," he said.
Saran, who served as India's high commissioner in Dhaka from 2012 to 2015, said that "trouble has been brewing" for the last few weeks and the government was "not able to bring it under control".
"The last two days saw an escalation in the level of protests. Therefore, some decisions had to be taken about how to go forward in controlling the protests. I think, the situation reached a point where it was clear that curfews and other restrictions were not adequate. Police and security forces' actions were not adequate and the only resort that was left was to bring in the army," he told PTI.
The former envoy believes Hasina was left with no choice but to step down.
"The only issue left was ensuring her safety, which the (Bangladesh) army helped in arranging. So, now we are in a situation where essentially the army has taken over. They have announced the establishment of an interim government. Who is going to be a part of the government, that is something they are going to discuss with the president," he added.
Saran said the "next couple of days will be critical" and it needs to be seen what impact her resignation has on the situation on the ground.
"There is a power vacuum right now which is being filled by the army. But... now we have to see... whether this situation and this development will lead to a halt in street protests and return of the students... and a reduction in street violence. That we have to see."
"We will also have to see the extent of attacks on Awami League members, members of the government and other supporters. All this will play out and (it needs to be seen) how much the army will be able to manage and control the situation. I think it is clear that there are ... political forces who are using students' grievances as an opportunity to settle political scores," he said.
This a "new Bangladesh, a new generation" that has come and their mentality is "very different" from the Bangladesh of 40 years or 30 years ago, the former envoy said, adding how much of an impact these political elements will have on the popular psyche is also to be seen.
India and Bangladesh share historical ties, with New Delhi having rendered crucial assistance to Dhaka during the Liberation War of 1971.
Asked about the immediate repercussions of the current events on India-Bangladesh ties, he said, "Obviously, there could be an overreaction to the past. This overreaction could manifest itself in some trouble at the border, some anti-India statement."
"So, we have to be alert on the border to make sure this does not lead to movement of any people from Bangladesh to India... We will have to be very vigilant on the border. That is the immediate requirement," Saran said.
India and Bangladesh share 4,096.7 km of border -- the longest land boundary that India shares with any of its neighbours.
Saran said the longer this environment continues, the more impact it will have on Bangladesh's economy because it is inherently integrated with the Indian economy.
"So, there will be a further downtrend in the situation in Bangladesh on the economic side. But, once things settle down, and it may take a few months... we will just have to wait for different political forces to kind of find some equilibrium inside Bangladesh," he said.
While the government-to-government relationship will obviously be impacted, the people-to-people relation and trade will go on, the former envoy said.
"But, we will not go back to business as usual," Saran underlined.
Asked that since the Land Boundary Agreement ratification could happen in the past, could the two countries again go the distance in the long run, he said whether it is Bangladesh or any other country, "you make the best of relations in any given time".
"There was a government in Dhaka which wanted to move and resolve issues. We did all that. It does not mean that it cannot happen again in future.
"When we had the chance, the alignment of the two leaderships was correct, we achieved a lot. Now, we just have to wait and see what is the kind of political dispensation that comes up in Bangladesh," Saran said.
He asserted that India-Bangladesh "achieved a lot under Hasina". That is very good and the relationship has to continue and grow, he said.
"I am sure we will be prepared for all eventualities. I think, everyone in Dhaka today is aware that that they need good relations, normal relations with India, but the question... but it's premature to think about that now, right now it is a crisis moment," Saran added.