HDFC Bank shares slide 2% amid reports tied to internal probe and alleged payment irregularities

These payments, the Indian Express investigation, based on internal records, has revealed, were meant for MSRDC as “differential interest,” i.e., interest over and above the specified rate, on its deposits.

“But instead of being credited directly to MSRDC’s account as interest earned, they were routed through the bank’s marketing department, disguised as contributions to a road safety awareness campaign through four local vendors,” the report added.

Significantly, records show that this payout was approved in the presence of HDFC Bank MD & CEO Sashidhar Jagdishan during senior-level discussions where a higher rate for MSRDC was “verbally” agreed upon.

The report added that many officials have testified in the internal probe that Jagdishan “participated in the call convened to examine how the bank could compensate MSRDC and was part of the decision to provide the differential interest through the marketing budget as a one-off arrangement.”

HDFC Bank’s non-executive chairman, Atanu Chakraborty's sudden exit

HDFC Bank’s non-executive chairman, Atanu Chakraborty, abruptly resigned on March 18, 2026, citing differences over “values and ethics” – a ground that the management of the country’s second-largest lender said was baffling, as the former bureaucrat offered no specific instance despite repeated requests.

Keki Mistry, a veteran of the HDFC Bank Group, was appointed as the interim chairman following the resignation and said there may have been “relationship issues” between Chakraborty and the executive leadership, but found no “substantive” concerns behind the departure.

Mistry emphasised that the bank’s operations and governance remain stable.

This was the first time that the part-time chairman of HDFC Bank left midway, raising concerns over its functioning.

RBI's statement

On March 19, 2026, hours after the resignation of HDFC Bank Chairman Atanu Chakraborty, citing ethical concerns, the Reserve Bank said there were no material concerns on record as regards the bank's conduct or governance.

"HDFC Bank is a Domestic Systemically Important Bank (D-SIB) with sound financials, a professionally run board, and a competent management team. Based on our periodical assessment, there are no material concerns on record as regards its conduct or governance," the Reserve Bank of India (RBI) said in a statement.

The statement emphasised that the bank remains well-capitalised and its financial position remains satisfactory with sufficient liquidity.