HDFC Bank shares fall amid probe into marketing department actions

Shares of private sector lender HDFC Bank fell nearly 2.5 per cent on Wednesday (May 27) after reports emerged about an internal vigilance investigation into transactions linked to the bank’s marketing department. The reports alleged “differential interest” payments worth Rs 45 crore made to the Maharashtra State Road Development Corporation (MSRDC).

The controversy has added fresh pressure on the private lender at a time when it is already facing questions over corporate governance following the abrupt resignation of former chairman Atanu Chakraborty in March.

‘Unsatisfactory’ rating

According to reports, HDFC Bank’s Audit Committee ordered a formal internal vigilance investigation after an audit of the bank’s marketing department flagged irregularities and rated the department’s functioning as “unsatisfactory”.

Also read: HDFC Bank row sparks consumer concerns over transparency and safety

The probe reportedly examined payments routed through the marketing division during FY24 and FY25. The transactions were allegedly linked to deposits made by MSRDC, with the bank accused of structuring additional returns as “differential interest” payments rather than standard interest payouts.

Reports claimed the funds were channelled through four local marketing vendors and shown as expenses for a “Road Safety Awareness Campaign”. The probe allegedly found invoice irregularities, including repeated use of the same validation photographs across multiple vendor bills.

Also read: HDFC Bank governance sound, no concerns found: RBI governor

The internal investigation reportedly identified accountability among several senior executives, including MD and CEO Sashidhar Jagdishan, though the bank has strongly denied any wrongdoing.

Bank’s statement

In a statement, HDFC Bank said it “strongly rejects” assumptions of wrongdoing or culpability based on selective information. The bank said it follows robust internal oversight, audit, and control processes, adding that all issues are handled in accordance with established procedures before any final conclusions are drawn.

The controversy has also revived attention on the sudden resignation of Atanu Chakraborty on March 18, 2026. In his resignation letter, the former Economic Affairs Secretary cited “certain happenings and practices” within the bank that were not in line with his “personal values and ethics”.

The resignation had triggered sharp investor concerns and wiped out billions in market value, with analysts viewing the remarks as an unusually direct corporate governance warning from the chairman of a major financial institution.

Also read: Atanu Chakraborty quits as HDFC Bank chair citing ‘ethical concerns’, shares tank 9 pc

The Reserve Bank of India later publicly backed HDFC Bank, saying there were no material governance or conduct-related concerns at the lender.

The latest allegations have intensified scrutiny of the bank and its leadership.

HDFC Bank shares are already down sharply this year, underperforming the broader banking index amid concerns over governance, merger integration challenges and uncertainty around Jagdishan’s leadership term, which ends in October.