HDFC Bank Faces Securities Fraud Lawsuit Over Alleged Covert Payments

The lawsuit, led by the firm Hagens Berman, covers the period between July 17, 2023, and May 26, 2026. Plaintiffs allege that CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan oversaw a scheme to route approximately 45 crore rupees—roughly $4.7 million—to the Maharashtra State Road Development Corporation. By masking these funds as marketing expenses for road safety campaigns, management reportedly bypassed Reserve Bank of India interest rate regulations to provide the state firm with a 6.01% interest rate, significantly higher than the standard retail offering.

Internal governance issues began to surface publicly in March 2026, when Chairman Atanu Chakraborty resigned, citing practices inconsistent with his personal ethics. The situation escalated on May 27, 2026, after an investigative report detailed an internal vigilance probe into the bank's leadership. These disclosures triggered sharp declines in HDFC American Depositary Shares, including a 7.28% drop following the chairman's departure and a subsequent 4.1% fall after the report surfaced. Hagens Berman partner Reed Kathrein stated that the firm is investigating whether senior leadership intentionally painted a false picture of compliance while executing these covert transactions. Investors who suffered losses during the specified class period have until October 13, 2026, to file for lead plaintiff status.