HDFC Bank board penalizes CEO and CFO over MSRDC deposit arrangement review

HDFC Bank's board penalized top executives over deposit arrangements with MSRDC. The internal review found business overreach but no personal gain or mala fide intent. Top executives received nominal penalties and warning letters following the review's recommendations. This action comes as the RBI pushes boards for greater oversight and before the CEO's term ends. The bank will formally communicate the matter and its findings to the Reserve Bank of India.

This decision, made on July 23, 2026, came after a special committee found their actions to be “business overreach” rather than outright wrongdoing

The board also issued warning letters to the other employees involved in the case, which relates to the mobilisation of large deposits from MSRDC between 2017 and 2021 through the alleged payment of around Rs 45 crore under the head of marketing expenses.

Mumbai, July 27: HDFC Bank on Monday said its board has issued warning letters and imposed a monetary penalty of Rs 1 lakh each on Managing Director and Chief Executive Officer Sashidhar Jagdishan, Chief Financial Officer Srinivasan Vaidyanathan and Group Head – Retail Assets Arvind Vohra following the conclusion of an internal review into the bank's deposit arrangements with the Maharashtra State Road Development Corporation (MSRDC). The action follows the findings of a Special Disciplinary Committee of Independent Directors, which examined the bank's arrangements with the state-owned corporation for mobilising deposits in 2017 and 2021.In a regulatory filing, the country's largest private sector lender said the board, at its meeting held on July 23, concluded that the conduct of the employees involved amounted to business overreach rather than any mala fide action, personal enrichment or improper motive.“The bank today announces conclusion of an internal review process pertaining to the arrangement with Maharashtra State Road Development Corporation (MSRDC) for garnering deposits in 2017 and 2021,” the private lender stated.Coal India Net Profit Rises 0.7% To ₹8,850 Crore In Q1 FY27; Revenue Up 8%“Based on the findings and recommendation of the Special Disciplinary Committee of Independent Directors, the Board at its meeting held on July 23, 2026, concluded that the conduct of the employees involved constituted business overreach rather than any mala fide action, personal enrichment, or improper motive,” HDFC bank noted.However, the board noted the possibility of divergence from applicable Reserve Bank of India (RBI) directions and, based on the committee's recommendations, decided to issue warning letters and levy a monetary penalty of Rs 1 lakh each on the bank's MD & CEO, CFO and Group Head – Retail Assets. Warning letters were issued to the remaining employees involved in the matter.The board also directed that the outcome of the review be communicated to the RBI.“The board decided to issue warning letters and monetary penalty of Rs 1 lakh for three senior employees (the Managing Director & CEO, Chief Financial Officer and Group Head – Retail Assets), and warning letters for the remaining employees,” the lender mentioned.(Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)