HDFC Bank gets warning letter from SEBI over investment banking activities

HDFC Bank on Thursday disclosed that the Securities and Exchange Board of India (SEBI) has issued an administrative warning in connection with alleged non-compliance in its investment banking operations.

The bank, in a regulatory filing, said the warning letter dated December 9, 2024, was received by it on December 11. The warning relates to observations made during SEBI's periodic inspection of the Bank’s investment banking activities, the filing said.

The market regulator cited alleged violations of the SEBI (Merchant Bankers) Regulations, 1992, the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, and the SEBI (Prohibition of Insider Trading) Regulations, 2015.

"...Securities and Exchange Board of India has issued an administrative warning letter to the Bank, in relation to observations made during the course of its periodic inspection of investment banking activities undertaken by the Bank, thereby alleging noncompliances with certain provisions of the SEBI (Merchant Bankers) Regulations, 1992, SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and SEBI (Prohibition of Insider Trading) Regulations, 2015," the filing said.

HDFC Bank assured that the administrative warning will have no financial or operational impact on its activities. The Bank also said that it will take necessary steps to address SEBI’s observations.

"The Bank will take necessary steps to address the concerns / directives mentioned in the letter," it said.

Shares of HDFC Bank were trading at ₹1,854 apiece on the Nationa Stock Exchange, down 0.48% from the previous close.

HDFC Bank, India’s largest private sector lender, reported a 17.4% rise in consolidated net profit to ₹17,830 crore for the quarter ended September 30, compared to ₹16,811 crore in the corresponding quarter of the previous fiscal. The lender's consolidated revenue surged by 14.7% year-on-year (YoY) to ₹76,040 crore from ₹66,320 crore in the same period last year. On a standalone basis, HDFC Bank’s net profit rose by 5% YoY to ₹16,821 crore, while revenue climbed 9.2% to ₹41,600 crore.

Total income, including interest income, income from investments, and other revenues, increased by 9% YoY to ₹85,500 crore in Q2 FY25, as compared to ₹78,406 crore in the July-September quarter of FY24.