“The bank has robust internal oversight, audit and control processes and systems. All issues are dealt with in accordance with the bank’s established norms, and full process is always followed before final determination post any internal review. We strongly reject any assumptions of wrongdoing or culpability based on selective material,” the bank said in a statement.
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Still, two of the group’s stocks featured on the list of top five Nifty losers Wednesday. HDFC Bank, which has already shed a fifth of its value on a rolling 12-month basis, lost 2.6% Wednesday to ₹758.65 apiece. HDFC Life retreated 1.5%.
The investigative report, citing internal bank documents and vigilance probe findings, alleged that HDFC Bank had promised MSRDC a 6.01% return on its savings deposits, well above the standard rate.
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When it could no longer offer this through normal channels, senior management allegedly devised an arrangement to route the differential interest through the marketing department via four local vendors. The report named MD and CEO Sashidhar Jagdishan, CFO Srinivasan Vaidyanathan and Chief Marketing Officer Ravi Santhanam as being allegedly involved in the arrangement.The report comes in the backdrop of former non-executive chairman Atanu Chakraborty’s resignation on March 18. In his resignation letter filed to the stock exchanges, Chakraborty had cited certain practices ‘not in congruence’ with his personal values and ethics, though he did not specify details at the time.
The bank has since appointed domestic and international law firms to conduct independent review of circumstances surrounding his departure.