HDFC Ex-Chairman Implicates Sale of Credit Suisse Perpetual Bonds in Bank Rift

HDFC Bank's Former Chairman Raises Concerns Over Mis-Selling of Credit Suisse Bonds

Mumbai: Former HDFC Bank chairman Atanu Chakraborty hinted on Monday that the "mis-selling" of Credit Suisse's perpetual bonds was a bone of contention between him and the bank's management.

Chakraborty, who stepped down on 18 March, expressed concerns over the issue in an interview with CNBC TV18. He stated that while he typically avoids sharing any boardroom discussions, the matter had been discussed in public by chief executive Sashidhar Jagdishan. In his 17 March resignation letter, Chakraborty had cited "certain happenings and practices" at the bank that were "not in congruence" with his personal values and ethics.

According to Jagdishan, HDFC Bank operates in West Asia through branches in Dubai. Bahrain customer engagement typically happens in Dubai, while transactions are booked in Bahrain. In June 2023, the Dubai Financial Services Authority clarified that clients who are continuously engaged in Dubai must also be onboarded there, even if accounts are booked in Bahrain. This issue surfaced after losses on Credit Suisse AT1 bonds.

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Regulatory Focus on HDFC Bank

The bank had informed the exchanges on 26 September 2025 that the Dubai Financial Services Authority barred the bank’s DIFC branch from conducting any business with new clients. On 23 March, HDFC Bank said the governance, nomination and remuneration committee (GNRC) directed an internal investigation. Thereafter, the GNRC pronounced staff accountability actions against a few employees on 9 March, including the removal of these three employees from the services of the bank.

Chakraborty expressed concerns that these conduct issues should not arise in the first place, or the tight supervision should ensure that even if they arise, they are nipped in the bud. He also stated that he does not wish to discuss other matters unless they are in public.

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Governance Issues at HDFC Bank

Since Chakraborty's sudden resignation, the bank has been busy assuaging investor concerns and trying to get to the bottom of the issue. Mint reported on 24 March that HDFC Bank was likely to appoint at least two law firms, Wadia Ghandy & Co, and Trilegal, to conduct a review of the circumstances leading to former chairman Chakraborty's exit. These law firms have been tasked with aiding the bank's internal legal counsels to sift through pages of minutes of past board meetings to see if Chakraborty had made any serious observations.