HDFC Bank Terminates Senior Executives Over Mis-selling of Credit Suisse AT1 Bonds

HDFC Bank Terminates Services of Top Executives Amid Mis-Selling Probe

Company Overview

HDFC Bank, India's largest private sector lender, has asked three of its top executives to leave the company as part of an ongoing investigation into alleged mis-selling of Credit Suisse's Additional Tier 1 (AT-1) bonds.

Investigation and Consequences

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The bank has terminated the services of Sampath Kumar, group head of branch banking; Harsh Gupta, executive vice president of Middle East, Africa, and NRI onshore business; and Payal Mandhyan, senior vice president. The exact date of their departure is unknown. HDFC Bank has not commented on the matter.

Background and Recent Developments

The investigation centers around allegations that HDFC Bank's Dubai branch mis-sold high-risk AT-1 bonds to unsuspecting retail customers, marketing them as "safe-haven" investments. The bonds were written off after Credit Suisse went bankrupt and was taken over by UBS. The Dubai Financial Services Authority (DFSA) has banned HDFC Bank from onboarding new customers due to failures in the sales process of these complex securities.

Share Price Performance

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The HDFC Bank share price closed at Rs 781, down 2.2% from the previous day, extending losses for a second day following the abrupt resignation of part-time chairman Atanu Chakraborty. The stock has lost around 7% in two days.