HDFC Bank Shares Under Scrutiny Amid Reports of Further Action Against Executives in AT-1 Bonds Mis-Selling Probe

HDFC Bank Embroiled in Fresh Controversy as 12 More Executives Face Action

India's largest private lender, HDFC Bank, continues to grapple with the controversy surrounding the alleged mis-selling of additional tier-1 (AT-1) bonds. According to a recent report by CNBC-TV18, the bank has penalized 12 additional executives, in addition to the three senior officials who were dismissed last month.

Those dismissed earlier include Sampath Kumar, group head of branch banking, along with Harsh Gupta (Executive Vice President, Middle East, Africa, and NRI onshore business) and Payal Mandhyan (Senior Vice President), as per an earlier report. The business news channel has reported that among the 12 executives on radar now, four executives, including Ashish Parthasarthy, group head of branch banking and treasury, are facing severe action, while eight others are likely to face minor penalties.

The controversy has led to the resignation of chairman Atanu Chakraborty, who cited "ethical concerns" as one of the reasons behind his decision to step down. In an interview with CNBC-TV18, Chakraborty noted that the mis-selling of AT-1 bonds, which had drawn regulatory scrutiny, as well as HDFC Bank's underperformance were key reasons behind his resignation.

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The developments come just days after Chakraborty's resignation and follow a penalty imposed by authorities in Dubai in September last year, which barred HDFC Bank from adding new customers at its branch in the Dubai International Financial Services Centre as a penalty for the alleged mis-selling of Credit Suisse's additional tier-1 bonds, which were written off in 2023.

HDFC Bank shares have been trading with a 2% cut at their 52-week low level of ₹726.75 on Thursday. In the last one month, the stock is down 17% and has underperformed the BSE Sensex, which has lost 11% during this period. So far in 2026, the bank stock is down 26% and has lost 18% in a year.