HDFC Bank Ltd, the second-most valuable listed firm in India, saw its shares falling 2 per cent in Wednesday's trade, losing over Rs 24,000 crore in market value amid a report by Indian Express that suggested that the lender allegedly ‘camouflaged’ crores as marketing spend to pay higher interest to a state firm. Business Today could not independently verify the report. 

As per the report, the bank did not disclose that an the Audit Committee of the Board (ACB), under the chairmanship of M D Ranganath, had on March 12 ordered a formal “Internal Vigilance Investigation” into payments totalling Rs 45 crore made to the Maharashtra State Road Development Corporation (MSRDC), a state government agency, during FY2024 and FY2025.

To recall,  part-time Chairman and Independent Director Atanu Chakraborty resigned on March 18, citing a lack of congruence with personal values and ethics. HDFC Bank had then suggested no specific material matters, operational issues, or governance lapses brought to its attention in its conversation with Chakraborty. 

Following the development, the stock fell 2.27 per cent to hit a low of Rs 761.25 apiece. The scrip was later trading at 1.98 per cent lower at Rs 163.55. HDFC Bank was commanding an m-cap if Rs 11,75,125.05 crore compared with Rs 11,99,374.28 crore on Tuesday, down Rs 24,249 crore. 

As per an Indian Express investigation, Rs 45 crore in payments, which  were meant for MSRDC as “differential interest” i.e., interest over and above the specified rate, on its deposits, were credited directly to MSRDC’s account as interest earned, routed through the bank’s marketing department. The payments were disguised as contributions to a road safety awareness campaign through four local vendors.The report suggested that the payout was approved in the presence of HDFC Bank MD & CEO Sashidhar Jagdishan during senior-level discussions where a higher rate for MSRDC was “verbally” agreed upon.