HDFC Bank Denies Any Wrongdoing Following Report of Rs 45 Crore Differential Interest Payment

HDFC Bank Denies Allegations of Irregularities in Internal Audit and Governance Processes

HDFC Bank has rejected reports alleging irregularities in its internal audit and governance processes. The bank has stated that it has "robust internal oversight, audit & control processes" in place to deal with any issues that may arise.

The bank has also denied any wrongdoing or culpability in a matter involving the alleged payment of Rs 45 crore to the Maharashtra State Road Development Corporation (MSRDC) to attract large deposits. This payment has been reported to have been disguised as marketing expenses routed through vendors. However, the bank has stated that it strongly rejects any assumptions of wrongdoing or culpability based on selective material.

According to NSE data, HDFC Bank shares were trading at Rs 760.65, down Rs 18.25 or 2.34 percent, at 1:38 pm on Wednesday. The stock has declined around 9.5 percent since March 19, when former part-time chairman Atanu Chakraborty resigned unexpectedly, raising concerns over governance practices at the lender.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The bank's CEO, Sashidhar Jagdishan, is also facing scrutiny, with allegations suggesting that he was aware of the arrangement. However, the bank has not commented further on the matter. The final outcome of the legal review, which was initiated by the bank to review the matter, is still awaited. The bank is also yet to file an application with the Reserve Bank of India for the reappointment of Jagdishan, whose current three-year term as CEO ends in October.