HDFC Bank fines CEO, CFO Rs 1 lakh each: Here's why

According to the bank, the committee did not find anything conclusive that would amount to mala fide action, personal enrichment or improper motive. However, it concluded that the conduct of the employees involved amounted to "business overreach".

In Short

• HDFC Bank fined MD & CEO, CFO and Group Head Rs 1 lakh each for business overreach
• No mala fide intent or personal gain found by independent committee
• Bank denies wrongdoing; robust controls in place, says legal review

HDFC Bank has imposed a monetary penalty of Rs 1 lakh each on its Managing Director and Chief Executive Officer Sashidhar Jagdishan, Chief Financial Officer Srinivasan Vaidyanathan and Group Head (Retail Assets) Arvind Vohra following an internal review into its arrangement with the Maharashtra State Road Development Corporation (MSRDC).

The decision was taken after the bank reviewed the arrangement for garnering deposits from MSRDC in 2017 and 2021.

WHAT DID THE REVIEW FIND?

In a stock exchange filing, HDFC Bank said a Special Disciplinary Committee of Independent Directors examined the matter.

According to the bank, the committee did not find anything conclusive that would amount to mala fide action, personal enrichment or improper motive. However, it concluded that the conduct of the employees involved amounted to "business overreach".

WHAT DID THE BANK SAY?

Explaining the outcome of the review, HDFC Bank said, "The Bank today announces conclusion of an internal review process pertaining to the arrangement with Maharashtra State Road Development Corporation (MSRDC) for garnering deposits in 2017 and 2021. Based on the findings and recommendation of the Special Disciplinary Committee of Independent Directors, the Board at its meeting held on July 23, 2026, concluded that the conduct of the employees involved constituted business overreach rather than any mala fide action, personal enrichment, or improper motive."

The bank further said that, keeping in view any potential divergence with the applicable RBI directions, the board accepted the committee's recommendations and decided to issue warning letters along with a monetary penalty of Rs 1 lakh each to the Managing Director & CEO, Chief Financial Officer and Group Head – Retail Assets.

It also issued warning letters to the remaining employees involved and directed that the matter be communicated to the Reserve Bank of India.

WHAT IS THE MSRDC MATTER?

Earlier in May, media reports alleged that HDFC Bank had paid Rs 45 crore to the Maharashtra State Road Development Corporation to attract large deposits.

According to the reports, these payments were classified as "marketing spends", and Jagdishan was aware of the payments.

BANK HAD DENIED WRONGDOING

HDFC Bank had denied any wrongdoing, saying it has robust internal oversight, audit and control processes and that all issues were dealt with in accordance with established norms.

The latest development also comes after another independent legal review found no evidence or record to support the ethical and governance concerns raised by former chairman Atanu Chakraborty when he resigned in March 2026.

- Ends