HDFC Bank Ltd has denied any allegations of wrongdoing and said it has a ''robust internal oversight, audit and control processes'' after a media report alleged that the lender paid higher interest to a state-owned company. Rejecting the news report, India's largest private sector lender said that it handles all issues in accordance with established norms. ''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," said HDFC Bank in a statement on Wednesday, May 27.
According to Bloomberg, the latest allegation has added to HDFC Bank Chief Executive Officer Sashidhar Jagdishan's recent list of troubles. HDFC Bank's shares dropped 2.3% in early trade and are down 23% so far in 2026, underperforming the broader Nifty Bank index. The Indian Express newspaper reported that an internal probe conducted by the bank found nearly Rs 45 crore was paid to the state-run Maharashtra State Road Development Corp. through marketing expenses classified as "differential interest".
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The internal audit also flagged contributions worth Rs 39.7 crore by the bank's marketing department toward the government agency's "Road Safety Awareness Campaign" during fiscal years 2024 and 2025, the newspaper reported. Jagdishan's current three-year term ends in October 2026, however, several media reports have indicated that he is keen to continue.
A three-decade veteran with the bank and who took charge as CEO in 2020, Jagdishan has overseen the lender's balance-sheet expansion and its merger with the country's largest mortgage financier three years ago. Wednesday's report adds to scrutiny at the lender, which plunged into a leadership crisis in March after its part-time chairman resigned, citing "certain happenings and practices" at the bank that were not aligned with his "personal values and ethics."
The lender subsequently appointed veteran banker Keki Mistry, a director on the board and one of India's best-known financial industry figures, as interim chairman for three months. The Reserve Bank of India, had come out in public support of the lender saying there are no material conduct or governance-related concerns at HDFC Bank.
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