HDFC Bank Penalises Senior Executives
HDFC Bank’s board has issued warning letters and imposed penalties of ₹1 lakh each on three senior executives following an internal review of the bank’s deposit arrangement with the Maharashtra State Road Development Corporation.
The action applies to Managing Director and Chief Executive Officer Sashidhar Jagdishan, Chief Financial Officer Srinivasan Vaidyanathan and Group Head of Retail Assets Arvind Vohra. Other employees involved in the matter received warning letters.
The review examined arrangements used to obtain deposits from the Maharashtra State Road Development Corporation in 2017 and 2021. Based on recommendations from a Special Disciplinary Committee comprising independent directors, the board concluded that the employees’ conduct amounted to business overreach.
The bank said the review did not find evidence of mala fide action, personal enrichment or improper motive. However, the board noted the possibility that the conduct may have diverged from applicable Reserve Bank of India directions. It has therefore directed that the matter be reported to the central bank.
The internal review followed reports alleging that HDFC Bank had made payments of around ₹45 crore to the road development corporation and classified them as marketing expenditure during the 2023-24 and 2024-25 financial years. The Indian Express reported that internal audit records had questioned these payments, while HDFC Bank publicly denied the allegations.
According to the report, the payments were allegedly routed through local vendors as contributions towards a road-safety awareness campaign instead of being directly recorded as interest paid to the corporation. The bank’s marketing department was reportedly given an unsatisfactory rating by the internal audit.
The disciplinary action comes amid broader scrutiny of governance at HDFC Bank. Former part-time chairman Atanu Chakraborty resigned in March 2026, citing practices that he said did not align with his values and ethics. External law firms appointed by the bank later said their review found no basis for his statement.
The case highlights the importance of transparent accounting, regulatory compliance and board oversight when banks offer commercial incentives to secure large institutional deposits.
