HDFC Bank has imposed a monetary penalty of Rs 1 lakh each on Managing Director and CEO Sashidhar Jagdishan, Chief Financial Officer Srinivasan Vaidyanathan and Group Head (Retail Assets) Arvind Vohra after completing an internal review of its deposit arrangement with the Maharashtra State Road Development Corporation (MSRDC).
The action follows the bank's review of the arrangements made to mobilise deposits from MSRDC in 2017 and 2021.
WHAT DID THE REVIEW FIND?
In a stock exchange filing, HDFC Bank said the matter was examined by a Special Disciplinary Committee comprising independent directors.
The committee found no conclusive evidence of mala fide intent, personal gain or any improper motive. However, it concluded that the conduct of the employees involved amounted to "business overreach."
WHAT DID THE BANK SAY?
Announcing the outcome of the review, HDFC Bank said, "The Bank today announces conclusion of an internal review process pertaining to the arrangement with Maharashtra State Road Development Corporation (MSRDC) for garnering deposits in 2017 and 2021. Based on the findings and recommendation of the Special Disciplinary Committee of Independent Directors, the Board at its meeting held on July 23, 2026, concluded that the conduct of the employees involved constituted business overreach rather than any mala fide action, personal enrichment, or improper motive."
The bank added that, considering the possibility of divergence from applicable RBI guidelines, the board accepted the committee's recommendations and decided to issue warning letters along with a monetary penalty of Rs 1 lakh each to the Managing Director & CEO, the Chief Financial Officer and the Group Head – Retail Assets.
Warning letters were also issued to the other employees involved, and the bank said the matter would be reported to the Reserve Bank of India.
WHAT IS THE MSRDC CASE?
The issue came to light in May after media reports alleged that HDFC Bank had paid Rs 45 crore to the Maharashtra State Road Development Corporation to attract large deposits.
According to the reports, the payments were recorded as "marketing spends," and Jagdishan was allegedly aware of the transactions.
BANK HAD REJECTED ALLEGATIONS
HDFC Bank had denied any wrongdoing, stating that it has strong internal oversight, audit and control mechanisms and that all matters were handled in line with established procedures.
The latest development also follows an independent legal review conducted after former chairman Atanu Chakraborty's resignation in March 2026, which found no evidence supporting the ethical and governance concerns he had raised.
