Shares of HDFC Bank fell in Mumbai trading on Wednesday after a media report alleged India's largest private sector lender paid higher interest to a state-owned company, adding to Chief Executive Officer Sashidhar Jagdishan's recent list of troubles. HDFC Bank's shares dropped 2.3% in early trading on Wednesday 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 about 450 million rupees ($4.7 million) was paid to the state-run Maharashtra State Road Development Corp. through marketing expenses classified as “differential interest”.
The internal audit also flagged contributions worth 397 million rupees by the bank's marketing department toward the government agency's “Road Safety Awareness Campaign” during fiscal years 2024 and 2025, the newspaper reported.
The lender did not immediately respond to Bloomberg's request for comment.
Amit Khurana, head of equities at Dolat Capital, a local brokerage firm, said investors are keen to see how the bank responds to the latest allegations and whether the management can convince the market that this does not snowball.
“More importantly, investors are looking out for clarity on whether the CEO will indeed get a re-appointment and till then we expect a tight price range to persist,” he said.
Jagdishan's current three-year term ends in October and local media has reported that he is keen to continue.
HDFC Bank Lags Banking Index in 2026
Photo Credit: (Photo: Bloomberg)
Jagdishan, a three-decade veteran with the bank and who took charge as CEO in 2020, has overseen the lender's balance-sheet expansion and its merger with the country's largest mortgage financier three years ago.
Wednesday's newspaper 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, which regulates the banking sector had come out in public support of the lender saying there are no material conduct or governance-related concerns at HDFC Bank.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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