Shares of HDFC Bank dropped by as much as 2% on Wednesday following reports that the bank allegedly made illegal payments to a state government agency in an effort to attract deposits.
According to a report by the Indian Express, citing unnamed sources and documents, HDFC Bank paid ₹45 crore (approximately $4.7 million) to Maharashtra’s road development corporation to secure large deposits. Current regulations prohibit lenders from offering varying interest rates to depositors.
The report claims that HDFC Bank masked these additional payments as marketing expenses to incentivize the department to make the deposits. It also suggested that CEO Sashidhar Jagdishan was aware of these transactions.
Reuters was unable to independently verify these claims, and an email seeking comment from HDFC Bank did not elicit an immediate reply.
By 10:40 a.m. IST in Mumbai, HDFC Bank’s shares were trading down 1.9% at ₹764.20, while the benchmark BSE Sensex showed a slight increase.
The decline in HDFC Bank’s shares has been notable, dropping 9.5% since March 19, when Atanu Chakraborty unexpectedly resigned from his role as part-time chairman, raising concerns about the bank’s governance practices. Chakraborty did not specify any allegations but indicated that the bank’s practices conflicted with his “personal” values and ethics.
Legal firms appointed by HDFC Bank to investigate the claims have reportedly yet to identify any significant lapses in the bank’s processes, as noted by Reuters earlier this month. The outcome of the legal review remains pending.
Additionally, HDFC Bank has not yet submitted an application for the reappointment of CEO Jagdishan, whose three-year term is set to expire in October.
($1 = 95.7600 rupees)
Published on May 27, 2026
