New Delhi, May 27: Shares of HDFC Bank, India’s largest private bank, experienced a decline on Wednesday. This drop is attributed to concerns raised in a report regarding the bank’s internal governance processes and allegations of irregular payments.
By 12:30 PM, HDFC Bank’s shares had fallen by 2.27%, reaching a low of ₹761.20.
According to a report by the Indian Express, the bank’s Audit Committee of the Board (ACB) ordered a formal internal vigilance inquiry on March 12 regarding a payment of ₹45 crore made to the Maharashtra State Road Development Corporation (MSRDC) during the fiscal years 2024 and 2025.
The report further stated that these payments were allegedly linked to varying interest rates on amounts deposited by MSRDC in the bank. Instead of being deposited directly as interest payments, the funds were reportedly funneled through the bank’s marketing department and presented as contributions to a road safety awareness campaign via four local vendors.
Additionally, the report claims that this arrangement was discussed at a senior management level in the presence of HDFC Bank’s MD and CEO, Shashidhar Jagdish.
These developments have also been connected to the sudden resignation of HDFC Bank’s non-executive chairman, Atanu Chakraborty, on March 18, who cited differences over values and ethics. However, the bank’s management later stated that they had not been informed of any specific concerns despite repeated requests.
As of the report’s writing, HDFC Bank had not provided any clarification to the exchanges regarding these allegations. It was noted that both the bank and the Reserve Bank of India (RBI) did not respond to detailed questions sent by the newspaper prior to publication.
Following Chakraborty’s resignation, experienced Keki Mistry was appointed as interim chairman, assuring that the bank’s operations and administration remain stable. Earlier in March, the RBI stated that there were no significant concerns regarding HDFC Bank’s operations or conduct.
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