An Indian Express investigation has revealed a Rs 45 crore ‘shadow deal’ involving the country’s largest private sector lender and the Maharashtra State Road Development Corporation (MSRDC). The report states that the Audit Committee of the Board (ACB) had ordered a formal internal vigilance investigation into payments totalling Rs 45 crore made to MSRDC, a state government agency, during FY2024 and FY2025.
The investigation reveals, “these payments, based on internal records, 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 vigilance inquiry, conducted between March and April this year, found that 10 top officials “bore responsibility”, including MD & CEO Sashidhar Jagdishan, CFO Srinivasan Vaidyanathan, and Chief Marketing Officer Ravi Santhanam, the report stated.
The order allegedly came after an internal audit of the bank’s marketing department, covering FY2024-25, flagged these payments and rated the department’s performance as “unsatisfactory.”
In a statement to financialexpress.com HDFC Bank said, ‘robust internal oversight, audit and control processes and systems. All issues are dealt with in accordance with Bank’s established norms, and full process is always followed before final determination post any internal review.”
“We strongly reject any assumptions of wrongdoing or culpability based on selective material,” it added.
The statement came after the country’s largest private sector lender’s share price fell more than 2.75% today, following the IE investigation.
According to the Indian Express investigation, which cited internal records, the payments were meant for MSRDC as “differential interest” — 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.