HDFC Bank dismissed allegations of payment irregularities amounting to Rs 45 crore, stating that assumptions of wrongdoing based on selective material were unfounded. The bank emphasized that all matters are handled following established internal processes. The private lender affirmed its adherence to robust internal oversight, audit, and control procedures.
A spokesperson for HDFC Bank refuted any suggestions of misconduct or culpability based on selective information. The bank clarified that all issues are addressed in line with established norms, with a thorough process preceding any final determination post internal review. Reports had surfaced alleging that the bank’s Audit Committee of the Board had initiated a formal internal vigilance probe into payments totaling Rs 45 crore to the Maharashtra State Road Development Corporation during FY2024 and FY2025.
The reports indicated that the payments were supposedly associated with differential interest provided on deposits held by MSRDC at the bank. Additionally, it was claimed that rather than directly crediting the amount as interest payments to the state agency, the funds were purportedly channeled through the bank’s marketing department and recorded as contributions to a road safety awareness campaign through four local vendors. The report also suggested that senior management discussions, including HDFC Bank’s Managing Director and CEO Sashidhar Jagdishan, were held regarding this arrangement.
The matter was also linked to the resignation of the bank’s former non-executive chairman Atanu Chakraborty in March. Chakraborty had resigned citing disagreements over values and ethics, while the bank’s management stated they were not informed of any specific concerns despite repeated inquiries. Subsequent to his resignation, Keki Mistry was appointed interim chairman, affirming the stability of the bank’s governance and operations. In March, the Reserve Bank of India had indicated no significant concerns regarding HDFC Bank’s governance or conduct.
Investor sentiment was impacted by these developments, with HDFC Bank’s shares declining nearly 2.5% during intra-day trading on the NSE. By mid-afternoon, the shares had dropped by Rs 18.75 or 2.41% to trade at Rs 760.15.
