HDFC Bank Under Scrutiny: Share Price Drops Amid Internal Probe

Intraday Stock Slide: Shares of HDFC Bank fell by as much as 2.5% during Wednesday’s trading session, dropping to an intraday low of Rs 759 on major Indian stock exchanges.

Internal Vigilance Probe Exposed: The sell-off was triggered by a media report revealing that the bank’s Audit Committee had ordered a formal internal vigilance investigation into payments totaling Rs 45 crore.

Disguised Interest Payouts: According to internal records, the bank allegedly paid this Rs 45 crore to the Maharashtra State Road Development Corporation (MSRDC) as “differential interest” to secure massive corporate deposits.
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Camouflaged as Marketing Spend: Since strict banking regulations prohibit lenders from offering varied interest rates to custom depositors, the funds were reportedly routed through the marketing department and disguised as a road safety awareness campaign using four local vendors.
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Top Leadership Named: The investigation report highlights that Managing Director and CEO Sashidhar Jagdishan was present during the verbal discussions and calls where routing this differential interest through the marketing budget as a one-off arrangement was planned.

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CMO Admits Facilitation: HDFC Bank’s Chief Marketing Officer, Ravi Santhanam, testified during the internal inquiry that the marketing division essentially acted as a facilitator to camouflage the interest reimbursement as advertising expenses.

National Herald

Escalating Governance Concerns: This development adds significant pressure to a stock that has already lost nearly 10% since March, right after former part-time chairman Atanu Chakraborty abruptly resigned over ethics and value mismatch concerns.

BFSI News

Official Bank Rebuttal: HDFC Bank has strongly rejected any assumptions of wrongdoing or culpability, clarifying that the institution relies on robust internal control systems and always follows a thorough process before drawing final conclusions.