HDFC Bank rejects ₹45 crore payment irregularity allegations, cites robust oversight
Synopsis
HDFC Bank is pushing back hard against reports of a ₹45 crore payment probe — but the denial has done little to calm markets. With shares down 2.41% and a former chairman's ethics-driven exit still unexplained, the governance cloud over India's largest private lender is far from lifted.
Key Takeaways
HDFC Bank on 27 May rejected allegations of ₹45 crore payment irregularities involving MSRDC during FY2024–FY2025 .
Reports alleged funds were routed through the bank's marketing department as a road safety campaign via four vendors, rather than as direct interest payments.
The bank's Audit Committee of the Board (ACB) reportedly ordered a formal internal vigilance investigation, per the original reports.
Former non-executive chairman Atanu Chakraborty resigned on 18 March , citing differences over values and ethics; the bank said it was not informed of specific concerns.
Keki Mistry was appointed interim chairman; the RBI had previously said there were no material governance concerns.
HDFC Bank shares fell 2.41% to ₹760.15 on the NSE during intra-day trade on Wednesday.
HDFC Bank on Wednesday, 27 May firmly dismissed allegations of payment irregularities involving ₹45 crore, stating that any assumption of wrongdoing based on selective material was misplaced and that all matters are handled strictly in accordance with established internal processes. The private sector lender's clarification came in direct response to reports alleging a formal internal vigilance probe ordered by its Audit Committee of the Board (ACB).
What the Allegations Claimed
Reports alleged that the bank's ACB had initiated a formal internal vigilance investigation into payments worth ₹45 crore made to the Maharashtra State Road Development Corporation (MSRDC) during FY2024 and FY2025. According to those reports, the payments were allegedly linked to differential interest offered on deposits that MSRDC maintained with the bank.
The reports further claimed that instead of directly crediting the amount as interest payments to the state agency, the funds were allegedly routed through the bank's marketing department and shown as contributions towards a road safety awareness campaign through four local vendors. The alleged arrangement was reportedly discussed at senior management levels, including in the presence of HDFC Bank Managing Director and CEO Sashidhar Jagdishan.
What HDFC Bank Said
'We strongly reject any assumptions of wrongdoing or culpability based on selective material. All issues are dealt with in accordance with established norms, and full process is always followed before final determination post any internal review,' an HDFC Bank spokesperson said. The bank asserted that it follows robust internal oversight, audit, and control processes at all levels.
The Chairmanship Controversy
The allegations were also linked in reports to the resignation of the bank's former non-executive chairman Atanu Chakraborty on 18 March. Chakraborty had stepped down citing differences over values and ethics, though the bank's management stated it was not informed of any specific concerns despite repeated requests.
Following his departure, Keki Mistry was appointed interim chairman and maintained that the bank's governance and operations remained stable. Earlier in March, the Reserve Bank of India (RBI) had stated there were no material concerns regarding HDFC Bank's governance or conduct — a position the bank has continued to cite in its defence.
Market Impact
The developments weighed on investor sentiment, with shares of HDFC Bank falling nearly 2.5% during intra-day trade on the National Stock Exchange (NSE). Around 2:11 pm IST, the stock had declined by ₹18.75, or 2.41%, to trade at ₹760.15. This is the second significant governance-related pressure point for the stock in as many months, following the chairman's exit in March.
What Happens Next
The bank has not confirmed or denied whether an internal review is under way, saying only that established processes are followed before any final determination. Regulators and investors will likely watch for any further disclosures from the ACB or clarifications from the RBI. The outcome of any internal review, if one is formally concluded, would have implications for the bank's governance narrative heading into the next earnings cycle.
Point of View
But the market has already delivered its verdict — a 2.41% intra-day drop is not the reaction of investors who are fully reassured. The real question is not whether processes were followed, but whether the bank's governance disclosures are keeping pace with what is clearly a turbulent internal period. A chairman's exit citing 'values and ethics', a reported ACB-ordered vigilance probe, and a ₹45 crore routing allegation involving a state agency — each individually manageable, together they form a pattern that demands more than a spokesperson's statement. The RBI's March clean chit buys credibility, but only until the next disclosure. HDFC Bank's leadership needs to get ahead of this narrative before it becomes a structural overhang on the stock.
NationPress
31 Jul 2026
Frequently Asked Questions
What are the ₹45 crore payment irregularity allegations against HDFC Bank?
Reports alleged that HDFC Bank made payments of ₹45 crore to the Maharashtra State Road Development Corporation (MSRDC) during FY2024 and FY2025, which were purportedly linked to differential interest on deposits. The funds were allegedly routed through the bank's marketing department as contributions to a road safety campaign via four vendors, rather than being credited directly as interest. HDFC Bank has rejected these allegations.
Has HDFC Bank confirmed an internal investigation?
HDFC Bank has not confirmed or denied the existence of a formal internal review. The bank stated only that all issues are handled in accordance with established norms and that a full process is followed before any final determination after an internal review.
Why did HDFC Bank's former chairman Atanu Chakraborty resign?
Atanu Chakraborty resigned as non-executive chairman on 18 March, citing differences over values and ethics. The bank's management said it was not informed of any specific concerns despite repeated requests. Reports have linked his exit to the broader governance controversy, though the bank has not confirmed this connection.
What did the RBI say about HDFC Bank's governance?
The Reserve Bank of India stated in March that there were no material concerns regarding HDFC Bank's governance or conduct. This position has been cited by the bank in its defence against the current allegations.
How have HDFC Bank shares reacted to the controversy?
HDFC Bank shares fell nearly 2.5% during intra-day trade on the NSE on 27 May, declining ₹18.75 or 2.41% to trade at ₹760.15 around 2:11 pm IST, reflecting investor concern over the governance-related reports.
