6 days ago
HDFC Bank Faces US Suit Over Alleged Disguised Interest Payments
Investors have sued HDFC Bank in a United States court.
They say the bank paid Maharashtra State Road Development Corporation more interest than ordinary customers received.
The complaint says the extra payments totaled about Rs 45 crore.
It alleges the money was passed through vendors and labeled as marketing expenses.
The investors say this hid important information from the market.
They also point to an internal investigation and the resignation of HDFC Bank chairman Atanu Chakraborty.
These claims have not been proven in court.
HDFC Bank says the case has no merit and that it will defend itself.
A federal securities class-action lawsuit in New York names HDFC Bank, CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan.
The complaint alleges that about Rs 45 crore in differential interest was routed to MSRDC through vendors and recorded as marketing expenses.
Plaintiffs claim HDFC Bank promised MSRDC 6.01% interest, compared with the 3.5% savings rate offered to regular customers.
The lawsuit alleges violations of US securities laws and seeks class certification, damages and a jury trial.
HDFC Bank called the lawsuit “without merit” and said it would vigorously defend itself.
- Who
- Investor Jwalant Natvarlal Soneji filed the case against HDFC Bank, CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan.
- What
- A federal securities class-action lawsuit alleges that differential interest payments to MSRDC were disguised as marketing expenses.
- Where
- The case was filed in the US District Court for the Southern District of New York.
- When
- The complaint covers American Depositary Share purchases from July 17, 2023, through May 26, 2026; the alleged payments occurred between 2023 and 2025.
- Why
- Plaintiffs allege that HDFC Bank concealed the payments, misrepresented its internal controls and financial position, and violated US securities laws.
Plaintiffs’ allegations
HDFC Bank’s response
Interest payments
Plaintiffs’ allegations
Plaintiffs allege that HDFC Bank routed about Rs 45 crore in extra interest to MSRDC through third-party vendors and recorded it as marketing expenditure.
HDFC Bank’s response
HDFC Bank rejects the lawsuit’s claims and says the case is without merit.
Disclosure and controls
Plaintiffs’ allegations
Plaintiffs allege that the bank’s SEC filings concealed the payments and materially misrepresented its internal controls and financial position.
HDFC Bank’s response
The bank has said it will vigorously defend itself; the articles do not provide a detailed response to each allegation.
Internal investigation
Plaintiffs’ allegations
The complaint cites an internal vigilance probe that allegedly found violations of RBI directions and anti-bribery policies, as well as responsibility among more than 10 senior officials.
HDFC Bank’s response
The articles do not state that HDFC Bank accepted the investigation’s alleged findings.
Key facts
- Court
- US District Court for the Southern District of New York
- Plaintiff
- Investor Jwalant Natvarlal Soneji
- Alleged amount
- About Rs 45 crore in differential interest
- Alleged beneficiary
- Maharashtra State Road Development Corporation
- Interest rates cited
- 6.01% allegedly promised to MSRDC versus 3.5% offered to regular savings customers
- Defendants
- HDFC Bank, Sashidhar Jagdishan and Srinivasan Vaidyanathan
- Relief sought
- Class certification, damages and a jury trial
Sources
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