HDFC Bank has after reports claimed the lender carried out an internal vigilance investigation into Rs 45 crore worth of payments linked to the Maharashtra State Road Development Corporation (MSRDC). The bank rejected any suggestion of misconduct, saying its internal systems are strong, and all matters are handled through proper processes, reported Reuters.
The reports, however, unsettled investors, with HDFC Bank shares falling sharply during Wednesday’s trading session. The stock dropped nearly 2.6%, trading at Rs 758.75 on the NSE around 1:29 pm, down Rs 20.15.
The issue came into focus after a report by The Indian Express, later cited by Moneycontrol, claimed that HDFC Bank had examined “differential interest” payments worth around Rs 45 crore made to MSRDC.
According to the report, the bank allegedly paid extra amounts to the Maharashtra government body to attract large deposits. It further claimed that these payments were shown as marketing expenses.
The report also said that the bank’s internal vigilance probe had allegedly fixed accountability on several senior executives, including Managing Director and Chief Executive Officer Sashidhar Jagdishan.
It also claimed that regulations do not allow banks to offer different interest rates to depositors.
Responding to the allegations, HDFC Bank said it has strong internal checks and systems in place.
A spokesperson for the bank told Reuters that HDFC Bank follows a proper review process and handles all matters in line with established norms.
“All issues are dealt with in accordance with established norms, and full process is always followed before final determination post any internal review,” the spokesperson said.
The bank also strongly pushed back against the allegations, saying it rejects “any assumptions of wrongdoing or culpability based on selective material”.
For now, investors are expected to watch closely for any further clarification from HDFC Bank or possible regulatory developments.