On March 18, 2026, during U.S. market hours, HDFC filed a letter with the Bombay Stock Exchange and the National Stock Exchange of India Limited, reporting the resignation of Mr. Atanu Chakraborty from his roles as part-time Chairman and Independent Director of HDFC. The Company’s letter attached Mr. Chakraborty’s resignation letter, which stated that “[c]ertain happenings and practices within the bank, that I have observed over last two years, are not in congruence with my personal Values and Ethics. This is the basis of my aforementioned decision.”
On this news, the price of HDFC’s American Depositary Shares (“ADS”) fell $2.09, or 7.28% to close at $26.62 per share on March 18, 2026, on unusually heavy trading volume.
On May 27, 2026, before the market opened, The Indian Express published an article entitled “HDFC Bank ‘camouflaged’ crores as marketing spend to pay higher interest to state firm.” The article reported that HDFC Bank had made covert payments of approximately “Rs 45 crore,” or approximately $4.7 million USD, to the Maharashtra State Road Development Corporation (“MSRDC”) to induce MSRDC to make large deposits with the Company. The Company offered 6.01% interest to MSRDC, a 2.51% markup over the interest offered to other savings accounts, and paid that markup by “disguis[ing] [it] as sponsorship payments for a road safety awareness campaign run by MSRDC.” Reportedly, an internal probe in March and April 2026 concluded that over ten top officials bore responsibility, including HDFC’s CEO Sashidhar Jagdishan.
On this news, HDFC’s ADS price fell $1.02, or 4.1%, to close at $23.78 per share on May 27, 2026, on unusually heavy trading volume.
The complaint filed in this class action alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) HDFC Bank camouflaged payments as marketing spend to pay higher interest to a state firm in order to induce deposits; (2) these activities were approved by senior management; (3) these activities likely violated regulations and the Company’s own policies, including those that prohibit payments that could constitute improper inducement; (4) as a result of the foregoing, the Company’s interest income and operating expenses were overstated; and (5) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
