HDFC Bank Faces Securities Fraud Lawsuit Over Alleged Deposit Scheme

The complaint filed by Hagens Berman targets a period between July 17, 2023, and May 26, 2026, alleging the bank funneled approximately Rs 45 crore (roughly $4.7 million) to the Maharashtra State Road Development Corporation. According to the filing, management disguised these payments as sponsorship for road safety campaigns to effectively provide a 6.01% interest rate, exceeding regulatory limits set by the Reserve Bank of India.

Financial statements during this period were allegedly manipulated, as the bank inflated interest income while burying the costs within marketing budgets. The scheme began to unravel in March 2026, when Chairman Atanu Chakraborty resigned, citing practices inconsistent with his personal ethics, which triggered a 7.28% drop in the bank's American Depositary Shares. A subsequent investigation by The Indian Express in May 2026 exposed internal probes into the leadership, causing a further 4.1% decline in share price. Reed Kathrein, a partner at Hagens Berman, stated the firm is investigating the extent to which executives concealed these practices while maintaining public claims of strong corporate governance.