India's HDFC Bank falls on report of payments to attract big deposits (updated)

HDFC Bank

27/05/2026 09:07

Updates to add bank statement; latest stock price

    MUMBAI, May 27 (Reuters) - Shares of India's top private lender HDFC Bank HDBK.NS fell as much as 2.5% on Wednesday after local media reported that the lender made illegal payments to a state government department to attract deposits.
The Indian Express newspaper reported, citing sources and documents, that HDFC Bank paid 450 million rupees ($4.7 million) to the road development corporation of the western state of Maharashtra to draw large deposits. Regulations do not allow lenders to pay varied interest rates to depositors. 
HDFC Bank disguised the additional payments as marketing spends to incentivise the department to make the deposits, the report said, adding that CEO Sashidhar Jagdishan was aware of these payments.
Reuters could not independently verify the report.
An HDFC Bank spokesperson told Reuters the lender has robust internal oversight, audit and control processes and systems.     
"All issues are dealt with in accordance with established norms, and full process is always followed before final determination post any internal review."
"We strongly reject any assumptions of wrongdoing or culpability based on selective material," the spokesperson said. 
Shares of HDFC Bank were trading down 2.5% at 759.50 rupees by 1:20 p.m. IST in Mumbai while the benchmark BSE Sensex .BSESN was marginally lower.
The shares have fallen 9.5% since March 19, when Atanu Chakraborty abruptly resigned as the lender's part-time chairman, raising questions about governance practices. 
While Chakraborty had not made specific allegations, he had said that practices at the bank were not in line with his "personal" values and ethics.
Legal firms appointed by HDFC Bank to review the claims have yet to find material lapses in processes followed by the bank, Reuters reported earlier this month.
The outcome of the legal review is awaited. 
HDFC Bank has also yet to submit an application for the central bank to reappoint CEO Jagdishan, whose three-year term ends in October.
         

($1 = 95.7600 Indian rupees)

HDFC Bank shares lag peers since chairman's resignation in March https://reut.rs/49RDaEw
 (Reporting by Ira Dugal; additional reporting by Vivek Kumar M in Mumbai; Editing by Mrigank Dhaniwala)
 ((Ira.Dugal@thomsonreuters.com; +91-9833024892;))