HDFC Bank Shares Fall On Deposit Payment Report
HDFC Bank shares fell on Wednesday after a report alleged that the lender made payments to a Maharashtra government department to attract large deposits. The bank rejected assumptions of wrongdoing and said it follows established internal review and control processes.
HDFC Bank Shares Decline
Shares of HDFC Bank fell as much as 2.5% during trade after the report raised fresh questions around governance and deposit practices at India’s largest private sector lender.
The stock was trading lower in Mumbai while the benchmark Sensex was largely flat. The decline added to recent pressure on the bank’s shares, which have weakened since March following governance-related concerns.
Maharashtra Deposit Payment Allegation
The report alleged that HDFC Bank paid ₹45 crore to Maharashtra’s road development corporation to attract large deposits. It further claimed that the payments were shown as marketing expenses.
Banking regulations do not allow lenders to offer different interest rates to depositors in a manner that bypasses rules. The allegation, therefore, has drawn market attention because large institutional deposits are important for bank liquidity and balance-sheet growth.
HDFC Bank Denies Wrongdoing
HDFC Bank said it has strong internal oversight, audit and control systems. The bank also said all issues are handled according to established norms and that no conclusion should be drawn from selective material.
The development comes as the bank continues to await the outcome of a legal review into earlier governance questions. It has also not yet submitted an application to the Reserve Bank of India for reappointment of CEO Sashidhar Jagdishan, whose term ends in October.
