New Delhi, May 27 (IANS) Shares of India’s largest private lender HDFC Bank fell more than 2 per cent during early trade on Wednesday following a report alleging irregular payment practices and raising concerns around the bank’s internal governance processes.
The banking stock declined as much as 2.27 per cent to Rs 761.25 apiece on the BSE in the morning session.
At the last count, the stock was trading at Rs 764.70, a decline of 1.84 per cent on the exchange.
A report by The Indian Express claims that HDFC Bank’s Audit Committee of the Board (ACB) on March 12 ordered a formal internal vigilance investigation into payments worth Rs 45 crore made to the Maharashtra State Road Development Corporation (MSRDC) during FY2024 and FY2025.
It further stated that the payments were allegedly linked to differential interest offered on deposits maintained by MSRDC with the bank.
However, instead of being directly credited to the state agency as interest payments, 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, according to the report.
In addition, the report alleged that the arrangement was discussed at senior management levels in the presence of HDFC Bank MD and CEO Sashidhar Jagdishan.
The report also linked the developments to the abrupt resignation of HDFC Bank’s non-executive chairman Atanu Chakraborty on March 18. He had stepped down citing differences over values and ethics, though the bank management later said it was not informed of any specific concerns despite repeated requests.
However, HDFC Bank has not issued any clarification to the exchanges regarding the report at the time of writing.
The report also stated that both the bank and the RBI did not respond to detailed queries sent by the newspaper before publication.
Following his resignation, HDFC Group veteran 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) stated that there were no material concerns regarding HDFC Bank’s governance or conduct.
–IANS
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