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Back in March, I posted about Chairman Atanu Chakraborty's resignation, the firing of senior executives linked to the Dubai/Bahrain AT-1 bond issue, and the sharp fall in HDFC Bank's stock. Since then, the story has evolved significantly.
Here's a timeline of what's happened since.
# March: The Beginning
On March 12, HDFC Bank's Audit Committee reportedly initiated an internal vigilance investigation after irregularities were flagged in the marketing department.
Just six days later, on March 18, Chairman Atanu Chakraborty resigned, stating that certain practices at the bank were "not in congruence with my personal values and ethics."
The timing naturally drew market attention, though no direct link has been officially established.
# April 18: Strong Q4 Results
Operationally, HDFC Bank delivered a solid quarter:
• Net profit: ₹19,221 crore (+9.1% YoY)
• Gross NPA: 1.15% (vs 1.33% last year)
• Deposits grew 14.4%, outpacing loan growth of 12%
• Dividend declared: ₹13/share
This was particularly important because post-merger concerns had centered around deposit growth lagging credit growth.
Management also said CEO Sashidhar Jagdishan's reappointment decision would come "in due course." His current term ends in October 2026.
# Early May: Legal and Governance Developments
Two law firmTwo law firms, Trilegal and Wadia Ghandy & Co., reviewed the bank's governance after Chakraborty's exit and reportedly found no significant lapses. Read as clearing the path for Jagdishan's reappointment.
Separately, Bombay HC quashed an unrelated bribery case against Jagdishan filed by the Lilavati Trust, calling it a personal vendetta and a counter to the bank's own loan recovery proceedings against the trust. A genuine legal win for the CEO, unconnected to anything else.
By mid-May, no permanent chairman had been found. Interim chairman Keki Mistry's term was ending June 18-19, so the bank started looking at a 90-day extension from RBI.
# May 27: The MSRDC Allegations Surface
An Indian Express investigation, citing internal records and witness testimony, alleged that HDFC Bank paid around ₹45 crore in disguised interest to Maharashtra State Road Development Corporation (MSRDC).
The background is important.
MSRDC was reportedly seeking an effective return of **6.01%** on what could eventually become a deposit relationship worth up to **₹25,000 crore**.

At the time:
• Regular HDFC savings account rates were around **3.5%**.
• The bank reportedly approved a temporary **4.5% special rate** for certain deposits.
• MSRDC allegedly sought **6.01%**.
And MSRDC's actual deposits never even reached the scale needed to justify that 4.5% window inflows briefly crossed ₹3,000 crore in 2023 before stalling, and the special window was shut by April 2022.
That leaves a gap of:
**6.01% – 4.5% = 1.51 percentage points**
And relative to ordinary depositors:
**6.01% – 3.5% = 2.51 percentage points**
But MSRDC's actual deposits never even reached the scale needed to justify that 4.5% window inflows briefly crossed ₹3,000 crore in 2023 before stalling, and the special window was shut by April 2022.
So the bank allegedly had a problem: it owed a gap between 4.5% and 6.01% on a relationship that wasn't even delivering the deposit volume promised, and no legal way to pay that gap directly.
According to the report, this difference was allegedly bridged through marketing expenditures tied to a road safety campaign executed via vendors.
The internal vigilance report reportedly cited:
• Approximately ₹45 crore in payments
• Reused images across multiple invoices
• Missing supporting documentation
• Payments routed through marketing budgets
• Questions around internal approvals and accountability
The report reportedly named over 10 senior officials, including the CEO, CFO, and CMO.
HDFC Bank has strongly denied any wrongdoing and stated that conclusions drawn from selective leaks are misplaced.
# June: The Bank Continues to Grow
Despite governance-related headlines, HDFC Bank continues to expand its funding base and international presence.
Most recently, reports suggest the bank raised **$750 million via 5-year senior unsecured bonds** through its GIFT City unit. The issue reportedly attracted strong investor demand and may have priced tighter than initial guidance. The proceeds are expected to support overseas operations and general banking activities.
Separately:
• RBI launched measures to attract foreign currency inflows.
• HDFC increased FCNR deposit rates significantly.
• Some brokerages, including Nomura, maintained positive views on the stock.
Leadership questions, however, remain unresolved:
• CEO reappointment is still pending.
• No permanent chairman has been announced.
• RBI approval for interim arrangements remains awaited.
The stock, currently around ₹784, has recovered from its low of ₹726 but remains well below its October 2025 high of around ₹1,020.
# Questions Still Open
• How do external law firm reviews and internal vigilance findings appear so different?
• If the practice was industry-wide, as some reports suggest, is this an HDFC-specific issue or a broader banking issue?
• Will RBI publicly address the findings of the vigilance report before key leadership decisions?
• Will any regulatory or disciplinary actions emerge from these allegations?
The ₹45 crore itself may not be financially material for a bank with deposits exceeding ₹27 lakh crore.
But in banking, governance and trust often matter as much as financial performance.
**Disclosure:** This is not investment advice. The post is based on publicly available reporting from Reuters, Bloomberg, Indian Express, Business Standard, the Probe , ANI, exchange filings, and other media reports. Allegations remain contested, and HDFC Bank has denied wrongdoing.

Link to my previous post :- [Previous Post Link](https://www.reddit.com/r/IndianStockMarket/comments/1s8fi5m/hdfc_bank_chairman_quits_3_execs_fired_stock_down/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)

Back in March, I posted about Chairman Atanu Chakraborty's resignation, the firing of senior executives linked to the Dubai/Bahrain AT-1 bond issue, and the sharp fall in HDFC Bank's stock. Since then, the story has evolved significantly.
Here's a timeline of what's happened since.
# March: The Beginning
On March 12, HDFC Bank's Audit Committee reportedly initiated an internal vigilance investigation after irregularities were flagged in the marketing department.
Just six days later, on March 18, Chairman Atanu Chakraborty resigned, stating that certain practices at the bank were "not in congruence with my personal values and ethics."
The timing naturally drew market attention, though no direct link has been officially established.
# April 18: Strong Q4 Results
Operationally, HDFC Bank delivered a solid quarter:
• Net profit: ₹19,221 crore (+9.1% YoY)
• Gross NPA: 1.15% (vs 1.33% last year)
• Deposits grew 14.4%, outpacing loan growth of 12%
• Dividend declared: ₹13/share
This was particularly important because post-merger concerns had centered around deposit growth lagging credit growth.
Management also said CEO Sashidhar Jagdishan's reappointment decision would come "in due course." His current term ends in October 2026.
# Early May: Legal and Governance Developments
Two law firmTwo law firms, Trilegal and Wadia Ghandy & Co., reviewed the bank's governance after Chakraborty's exit and reportedly found no significant lapses. Read as clearing the path for Jagdishan's reappointment.
Separately, Bombay HC quashed an unrelated bribery case against Jagdishan filed by the Lilavati Trust, calling it a personal vendetta and a counter to the bank's own loan recovery proceedings against the trust. A genuine legal win for the CEO, unconnected to anything else.
By mid-May, no permanent chairman had been found. Interim chairman Keki Mistry's term was ending June 18-19, so the bank started looking at a 90-day extension from RBI.
# May 27: The MSRDC Allegations Surface
An Indian Express investigation, citing internal records and witness testimony, alleged that HDFC Bank paid around ₹45 crore in disguised interest to Maharashtra State Road Development Corporation (MSRDC).
The background is important.
MSRDC was reportedly seeking an effective return of **6.01%** on what could eventually become a deposit relationship worth up to **₹25,000 crore**.

At the time:
• Regular HDFC savings account rates were around **3.5%**.
• The bank reportedly approved a temporary **4.5% special rate** for certain deposits.
• MSRDC allegedly sought **6.01%**.
And MSRDC's actual deposits never even reached the scale needed to justify that 4.5% window inflows briefly crossed ₹3,000 crore in 2023 before stalling, and the special window was shut by April 2022.
That leaves a gap of:
**6.01% – 4.5% = 1.51 percentage points**
And relative to ordinary depositors:
**6.01% – 3.5% = 2.51 percentage points**
But MSRDC's actual deposits never even reached the scale needed to justify that 4.5% window inflows briefly crossed ₹3,000 crore in 2023 before stalling, and the special window was shut by April 2022.
So the bank allegedly had a problem: it owed a gap between 4.5% and 6.01% on a relationship that wasn't even delivering the deposit volume promised, and no legal way to pay that gap directly.
According to the report, this difference was allegedly bridged through marketing expenditures tied to a road safety campaign executed via vendors.
The internal vigilance report reportedly cited:
• Approximately ₹45 crore in payments
• Reused images across multiple invoices
• Missing supporting documentation
• Payments routed through marketing budgets
• Questions around internal approvals and accountability
The report reportedly named over 10 senior officials, including the CEO, CFO, and CMO.
HDFC Bank has strongly denied any wrongdoing and stated that conclusions drawn from selective leaks are misplaced.
# June: The Bank Continues to Grow
Despite governance-related headlines, HDFC Bank continues to expand its funding base and international presence.
Most recently, reports suggest the bank raised **$750 million via 5-year senior unsecured bonds** through its GIFT City unit. The issue reportedly attracted strong investor demand and may have priced tighter than initial guidance. The proceeds are expected to support overseas operations and general banking activities.
Separately:
• RBI launched measures to attract foreign currency inflows.
• HDFC increased FCNR deposit rates significantly.
• Some brokerages, including Nomura, maintained positive views on the stock.
Leadership questions, however, remain unresolved:
• CEO reappointment is still pending.
• No permanent chairman has been announced.
• RBI approval for interim arrangements remains awaited.
The stock, currently around ₹784, has recovered from its low of ₹726 but remains well below its October 2025 high of around ₹1,020.
# Questions Still Open
• How do external law firm reviews and internal vigilance findings appear so different?
• If the practice was industry-wide, as some reports suggest, is this an HDFC-specific issue or a broader banking issue?
• Will RBI publicly address the findings of the vigilance report before key leadership decisions?
• Will any regulatory or disciplinary actions emerge from these allegations?
The ₹45 crore itself may not be financially material for a bank with deposits exceeding ₹27 lakh crore.
But in banking, governance and trust often matter as much as financial performance.
**Disclosure:** This is not investment advice. The post is based on publicly available reporting from Reuters, Bloomberg, Indian Express, Business Standard, the Probe , ANI, exchange filings, and other media reports. Allegations remain contested, and HDFC Bank has denied wrongdoing.