The scam at India’s biggest private bank HDFC

Picture Credit: by Quartz

It began with three sentences. On the night of March 17, 2026, Atanu Chakraborty, a decorated former IAS officer and non-executive chairman of HDFC Bank, resigned with immediate effect, citing "happenings and practices within the bank that are not in congruence with my personal values and ethics." He named nothing. He accused no one. But the damage was instant and enormous.

Within seventy-two hours, HDFC Bank's market capitalisation shed roughly $7 billion, and three senior executives were fired following an internal probe into alleged mis-selling of high-risk bonds to NRI clients through the bank's Dubai branch.

That was only the beginning. A separate internal vigilance probe, ordered by the Audit Committee of the Board on March 12, just six days before Chakraborty's resignation, concluded that over ten senior officials bore responsibility for irregular payments worth nearly ₹45 crore linked to the Maharashtra State Road Development Corporation.

The mechanics of the alleged scheme were brazen. Payments made during FY2024 and FY2025 were allegedly routed through the bank's marketing department and disguised as contributions to a road safety awareness campaign, effectively giving MSRDC a return of 6.01% on its savings deposits, far above the 3.5% available to ordinary customers, in exchange for routing large deposits to the bank. RBI rules explicitly prohibit such negotiated rates.

The internal probe named the very top of HDFC Bank's executive pyramid, MD and CEO Sashidhar Jagdishan, CFO Srinivasan Vaidyanathan, and CMO Ravi Santhanam.

The bank has strongly rejected any assumptions of wrongdoing, citing its "robust" internal oversight and audit processes. But with foreign institutional investors holding over 47% of HDFC Bank's shares, this is not a story that will be quietly shelved.

India's most-watched private bank is facing a governance reckoning, and the full truth is still unfolding.