HDFC Bank Fines CEO, CFO in MSRDC Case
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HDFC Bank has imposed a penalty of ₹1 lakh each on three senior executives, including its managing director and chief executive officer, following an internal review of deposit-related arrangements involving the Maharashtra State Road Development Corporation.
HDFC Bank Penalises Senior Executives
Managing Director and CEO Sashidhar Jagdishan, Chief Financial Officer Srinivasan Vaidyanathan and Retail Assets Group Head Arvind Vohra were each fined ₹1 lakh following recommendations made to the bank’s board.
The executives were also issued warning letters over their involvement in arrangements connected with MSRDC deposits secured in 2017 and 2021. Other employees associated with the matter reportedly received disciplinary warnings.
MSRDC Deposit Arrangements Investigated
A special disciplinary committee comprising independent directors reviewed the transactions and examined whether the arrangements complied with applicable banking regulations.
The committee did not find conclusive evidence of personal enrichment, malicious intent or deliberate wrongdoing. However, it concluded that the conduct amounted to business overreach and may have deviated from certain Reserve Bank of India directions.
The review focused on payments allegedly made in connection with attracting large institutional deposits from MSRDC.
HDFC Bank to Inform RBI
The bank’s board has directed management to formally communicate the findings of the internal investigation and the disciplinary action to the Reserve Bank of India.
Earlier allegations claimed that approximately ₹45 crore had been paid in connection with securing MSRDC deposits and recorded under marketing expenses. HDFC Bank denied any wrongdoing and maintained that its governance, audit and internal control systems remained robust.
The penalties represent internal disciplinary action and do not, by themselves, establish criminal wrongdoing by the executives involved.
