India’s largest private lender HDFC Bank has reportedly terminated its group head of retail branch banking Sampath Kumar, along with two other senior officials. According to a CNBC-TV18 report, the step was taken following allegations of mis-selling high-risk additional tier-1 (AT-1) bonds issued by Credit Suisse.
The action came shortly after the resignation of chairman Atanu Chakraborty triggered a sharp sell-off. The lender reportedly lost nearly ₹96,000 crore in market capitalisation over two trading sessions.
Alongside Kumar, the bank has dismissed Harsh Gupta, Executive Vice President handling Middle East, Africa and NRI onshore business and Payal Mandhyan, Senior Vice President, the report added. Both had been suspended in January 2025 after an internal probe was initiated into activities at the bank’s Dubai branch.
The report further stated that while Kumar may not have directly engaged in mis-selling, the lapses occurred under his supervision. However, Gupta and Mandhyan were allegedly directly involved in pitching the instruments.
Several investors, primarily NRIs, have accused bank officials of misrepresenting the nature of AT-1 bonds. Customers claim they were persuaded to shift funds from foreign currency non-resident (FCNR) deposits in India to Bahrain, where the instruments were marketed as fixed-maturity, assured-return products—despite being perpetual and inherently risky, the CNBCTV-18 reported.
The controversy ties back to the $20 billion AT-1 bond write-off during the bailout of Credit Suisse, later deemed “unlawful” by the Swiss Federal Administrative Court. Appeals by FINMA and UBS are currently pending before the Supreme Court.
Meanwhile, the Dubai Financial Services Authority has barred HDFC Bank’s Dubai branch from onboarding new clients, the report stated.