HDFC Bank‘s board has issued warning letters to Managing Director and CEO Sashidhar Jagdishan, Chief Financial Officer Srinivasan Vaidyanathan and Group Head-Retail Assets Arvind Vohra, and imposed a monetary penalty of ₹1 lakh each, the bank informed the stock exchanges on Monday.
The board concluded that their conduct in connection with the Maharashtra State Road Development Corporation (MSRDC) deposit arrangements amounted to “business overreach” rather than any mala fide action or personal enrichment.
However, the bank said the warning letters and penalties were issued “keeping in view any potential divergence” from applicable Reserve Bank of India (RBI) directions and based on the recommendations of the Special Disciplinary Committee of Independent Directors. The disclosure, it added, was being made from a good governance perspective.
The action follows an internal review of arrangements with MSRDC for mobilising deposits in 2017 and 2021.
“The conduct of the employees involved constituted business overreach rather than any mala fide action, personal enrichment, or improper motive,” the bank said. The remaining employees identified in the review will also receive warning letters, it added.
The board further directed that the matter be communicated to the Reserve Bank of India.
In May, The Indian Express reported that the private-sector lender had allegedly disguised ₹45 crore in interest payments to MSRDC as marketing expenses. Following the report, HDFC Bank told the stock exchanges on May 28 that HDFC had denied any wrongdoing , saying it had robust internal oversight, audit & control processes and all issues were dealt with in accordance with the established norms.
Recently, three US law firms launched investigations into HDFC Bank over possible violations of US federal securities laws. The firms—the Law Offices of Frank R. Cruz, the Law Offices of Howard G. Smith, and Glancy Prongay Wolke & Rotter LLP—said investors who suffered losses in HDFC Bank securities could contact them regarding potential claims.
Responding to the development, the bank said, “In the United States, it is common for plaintiffs’ law firms to issue press releases like these in an effort to identify a potential plaintiff after a decline in a company’s stock price. We wish to confirm that no lawsuit has been filed and if a lawsuit is filed, the Bank intends to vigorously defend itself.”
This comes after another independent legal review found no evidence or record to support the ethical and governance concerns raised by former chairman Atanu Chakraborty when he resigned in March 2026.
Shares of HDFC Bank closed 0.4% lower at ₹739.55 on the BSE on Monday.