HDFC Bank faces US class-action suit

New Delhi: HDFC Bank is facing a federal securities class-action lawsuit in New York over allegations that it illegally inflated interest payouts to Maharashtra State Road Development Corporation (MSRDC) by disguising them as marketing expenses.

The complaint, filed in the US District Court for the Southern District of New York by investor Jwalant Natvarlal Soneji, names HDFC Bank, CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan as defendants. It covers investors who purchased the bank’s American Depositary Shares between July 17, 2023 and May 26, 2026. The lawsuit alleges HDFC promised MSRDC a 6.01 per cent interest rate to attract deposits, compared with the 3.5 per cent savings rate offered to regular customers. It claims that between 2023 and 2025, about Rs 45 crore in differential interest was routed to MSRDC through third-party vendors and recorded as marketing expenditure for a road-safety campaign.

The complaint alleges an internal vigilance probe found the arrangement violated RBI directions and the bank’s anti-bribery policies.

Plaintiffs also allege that HDFC’s SEC filings materially misrepresented its internal controls and financial position by concealing the interest payments as marketing expenses. They cite Chairman Atanu Chakraborty’s resignation in March 2026, when he referred to practices within the bank that were not in line with his “personal Values and Ethics”. The lawsuit further points to a May 27 *Indian Express* report on the internal probe, which allegedly found over 10 senior officials responsible, including Jagdishan, who allegedly approved the payments verbally.

The plaintiffs allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and are seeking class certification, damages and a jury trial.

HDFC Bank said the lawsuit is “without merit” and that it intends to “vigorously defend itself”.

♦ US suit: Federal securities class action in New York.

♦ Allegation: Rs 45 crore differential interest allegedly disguised as marketing expenses.

♦ Beneficiary: Maharashtra State Road Development Corporation.

♦ Defendants: HDFC Bank, CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan.

♦ Plaintiffs: Seek damages, class certification and jury trial.

♦ Bank: Calls the lawsuit “without merit” and will defend it