HDFC Bank slaps Rs 1 lakh penalty on CEO, CFO over MSRDC deposits, dismisses ‘malafide action’

HDFC Bank imposes Rs 1 lakh penalty on CEO, CFO and a senior executive over business overreach in MSRDC deposit matter, following an internal probe and board recommendations.

Written by FE Business

Updated: July 27, 2026 18:41 IST

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HDFC Bank has slapped a Rs 1 lakh penalty to three of its senior executives after an internal probe found “business overreach” in the manner the bank secured deposits from the Maharashtra State Road Development Corporation (MSRDC).

The penalised executives are Managing Director and CEO Sashidhar Jagdishan, Chief Financial Officer Srinivasan Vaidyanathan and Group Head-Retail Assets Arvind Vohra. Several other employees received warning letters without monetary penalties, the bank said in a stock exchange filing.

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“Keeping in view any potential divergence with the applicable RBI Directions and based on the recommendations… the Board decided to issue warning letters and a monetary penalty of Rs 1 lakh for three senior employees…and warning letters for the remaining employees,” the bank’s filing stated.

HDFC Bank said its board acted on the recommendation of a Special Disciplinary Committee of Independent Directors, which examined the bank’s 2017 and 2021 arrangements with MSRDC for garnering deposits.

Crucially, the bank stopped short of alleging any dishonest intent. “The conduct of the employees involved constituted business overreach rather than any mala fide action, personal enrichment, or improper motive,” the filing stated, citing the board’s meeting held on July 23.

HDFC Bank said the action was taken partly to pre-empt any divergence with Reserve Bank of India norms and confirmed the regulator has been informed of the disciplinary findings.

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Earlier, media reports in May alleged HDFC Bank paid MSRDC roughly ₹45 crore, booked as “marketing spends”, to draw large deposits from the state road agency and that CEO Jagdishan was aware of the payments. At the time, the bank rejected any suggestion of impropriety, maintaining that its internal controls, audits and oversight mechanisms had functioned as intended.

The disciplinary action also landed months after a separate, unrelated controversy at the bank. Former chairman Atanu Chakraborty quit in March 2026 citing governance and ethical concerns. HDFC Bank later said that a subsequent independent legal review found no evidence supporting those concerns.

This article was first uploaded on July twenty-seven, twenty twenty-six, at thirty-six minutes past six in the evening.