The first error message ("Could not
chdir...") is coming from ChrootDirectory in your
sshd_config. From the documentation:
Specifies the pathname of a directory to
chroot(2) to after
authentication. All components of the pathname must be root-owned
directories that are not writable by any other user or group. After
sshd(8) changes the working directory to the user's home
After attempting the chroot is when the problem occurs about not being able to find
bash. This is related to not having the entire chroot environment setup (see the documentation for
If you want the user's interactive environment to be
chroot'd (not just
sftp)you have a lot of work to do. Depending on your ultimate goal, you may want to simply use a restricted shell instead (check out
vim(1) and search for "restricted" to find some ideas of how to set things up).
I found a couple of other references to similar questions on askubuntu.com and on archlinux.org (be sure to scroll to the bottom of the second one for a description of why the directory must be root owned).