HDFC Bank Shares Fall After Report of Payments

HDFC Bank shares fell after a report alleged the bank paid 450 million rupees to the Maharashtra State Road Development Corporation and recorded the transfers as marketing expenses to secure large deposits. The stock dropped as much as 2% and was trading about 1.9% lower at 764.20 rupees around 10:40 a.m. in Mumbai on Wednesday, while the benchmark BSE Sensex was little changed.

The report also alleged that Chief Executive Sashidhar Jagdishan was aware of the transactions. HDFC Bank did not immediately respond to an emailed request for comment.

The allegations have focused attention on the bank’s internal controls and its process for legal review. The lender previously engaged outside law firms to examine certain practices after earlier reporting; those firms have not identified material deviations to date, and the review remains ongoing with no final conclusion reached.

Investors are also watching management continuity. The bank’s chairman resigned on March 19, and the stock has fallen about 9.5% since that date. Jagdishan’s three-year term as CEO ends in October, and the application for his reappointment has not yet been filed with the Reserve Bank of India.

Market participants are awaiting whether HDFC Bank issues a detailed rebuttal or clarification, whether the legal review reaches a firm result, and whether regulators request additional information. Until those matters are addressed, traders are monitoring headlines related to governance and leadership.