HDFC Bank says all seven Bahrain claims over Credit Suisse AT1 bonds rejected

has won all seven cases filed against it in Bahrain by investors in Credit Suisse AT-1 bonds matter, providing the lender relief from a key legal overhang arising from allegations of mis-selling of the high-risk securities, ET has learnt.

In a statement to ET, the country’s largest private-sector lender said the High Civil Court of Bahrain on September 9 passed favourable orders in the final two proceedings against it. Five similar cases had been rejected by the Bahrain court between July and August.

“All seven cases of legal proceedings against HDFC Bank in the CS AT1 bonds investment matter stand rejected by the Bahrain Court,” the bank told ET exclusively. All allegations were rejected outright by the Court.”

According to HDFC Bank, the investors had alleged gross negligence, intentional misrepresentation, incorrect customer classification, non-disclosure of product features, misuse of financial leverage and violations of product-suitability principles in connection with their purchases of through the bank.

The lender told ET that the Bahrain court rejected these allegations after finding that the investors had failed to produce sufficient admissible evidence either to substantiate their claims against HDFC Bank or demonstrate that losses suffered by them were attributable to the bank.

Investors were also ordered to bear the costs of the proceedings in each of the seven cases, HDFC Bank said.

The disputes stem from the write-down of Credit Suisse’s AT1 securities to zero during its emergency takeover by UBS in March 2023, which resulted in losses for bondholders globally.

said the Bahrain judgments follow favourable orders from India’s National Consumer Disputes Redressal Commission in March 2026 in complaints filed by Credit Suisse AT1 investors against the lender.

The bank said the NCDRC had held that it acted only as a facilitator for the investments and that customers had the autonomy to make their own investment decisions.

According to HDFC Bank, the commission also observed that the investors were aware of the nature of the instruments and had voluntarily chosen to invest in the bonds, raising complaints only after the investments failed to deliver the expected returns.

The lender sought to draw a distinction between facilitating customer investments and guaranteeing their outcome.

“Where required, the Bank will stand with its customers. However, the Bank is not in the business of underwriting the investments made by the customers out of their own judgement and it will therefore defend itself rigorously against any unsubstantiated claims,” HDFC Bank said in its statement.

The favourable court orders reduce a legal overhang for the lender from the Credit Suisse AT1 episode, although the bank had separately faced scrutiny over processes at its overseas operations earlier this year.

HDFC Bank’s managing director and CEO Sashidhar Jagdishan has so far maintained that no fraud or mis-selling was committed.

“In June 2023, the Dubai Financial Services Authority clarified that clients who are continuously engaged in Dubai must also be onboarded there, even if accounts are booked in Bahrain,” Jagdishan told ET in an interview on March 23. “Our assessment is that this was a technical lapse in documentation and regulatory interpretation—not fraud or mis-selling. We initiated an internal review and took staff accountability actions through our disciplinary and board-level committees, with a right to appeal. There is no fraud, no misappropriation, and no integrity issue that has surfaced so far.”

The bank has separately stated that it identified gaps in client onboarding requirements at its Dubai International Financial Centre (DIFC) branch and has since completed a detailed review. “Appropriate remedial actions have been taken in line with internal policies. Personnel changes have been undertaken along with appropriate action as per the bank’s conduct regulation,” it said on March 21.

The regulatory fallout had already become public in September 2025, when HDFC Bank disclosed that the Dubai Financial Services Authority had barred its DIFC branch from onboarding new clients or undertaking fresh business.

The prohibition followed non-compliance with regulatory requirements related to servicing clients not onboarded through the DIFC entity, as well as lapses in advisory and credit arrangement practices.

The branch remains prohibited from soliciting or conducting business with new clients across financial services including advising on financial products, arranging investment deals, extending or advising on credit, and custody-related activities.