HDFC Bank Shares Drop 2% Amid Probe Over ₹45 Crore ‘Differential Interest’ Payments
Internal Vigilance Report Exposes Alleged Violations in MSRDC Deposits; Questions Mount Over Governance as CEO Sashidhar Jagdishan Comes Under Scrutiny
Shares of India’s largest private sector lender, HDFC Bank, slipped nearly 2% on Wednesday following a media report detailing an internal vigilance probe into ₹45 crore worth of alleged “differential interest” payments made to the Maharashtra State Road Development Corporation (MSRDC).
According to a report by The Indian Express, the bank conducted an internal investigation into payments made between FY24 and FY25 to attract large deposits from MSRDC. The probe reportedly found that the bank promised a higher interest rate of 6.01% on deposits up to ₹25,000 crore but routed the excess amount through local vendors as “marketing sponsorships” a practice that allegedly violated RBI guidelines on uniform deposit rates.
Details of the Alleged Irregularities
The report claims that the extra payments were disguised to bypass regulatory restrictions that prohibit banks from offering different interest rates to different depositors. The internal vigilance report, submitted in April 2026, reportedly identified accountability among several senior executives, including MD & CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan.
The timing of the revelations has added to the controversy. The probe findings emerged shortly after former HDFC Bank Chairman Atanu Chakraborty resigned abruptly in March 2026, citing personal reasons. His resignation had already sparked speculation in the market.
Market Reaction
HDFC Bank shares fell as much as 2.27% to ₹761.25 on the BSE during early trade on Wednesday. The stock later pared some losses but remained under pressure. The broader market, however, remained relatively stable.
Analysts noted that while the amount involved is small relative to the bank’s overall deposit base, the governance concerns raised by the report could weigh on investor sentiment in the near term.
Bank’s Response and Regulatory Angle
HDFC Bank has not yet issued an official statement on the matter. Sources close to the bank indicated that the internal probe was a routine exercise and that corrective measures have already been initiated.
The Reserve Bank of India (RBI) is yet to comment on the issue. However, any violation of deposit rate regulations could attract regulatory scrutiny and potential penalties.
Broader Implications
The development comes at a time when HDFC Bank is still integrating with its erstwhile parent HDFC Ltd following the 2023 merger. The bank has been focusing on strengthening its governance framework and digital capabilities.
Market experts believe the incident highlights the need for stricter internal controls in large banks, especially when dealing with high-value government and institutional deposits.
What Lies Ahead?
Investors will closely watch for any official clarification from HDFC Bank and the RBI’s response. In the short term, the stock may remain volatile. However, analysts remain largely positive on the bank’s long-term fundamentals, citing its strong balance sheet, robust asset quality, and leadership position in the private banking space.
The episode serves as a reminder that even India’s most trusted financial institutions are not immune to governance challenges in an increasingly regulated environment.
