The report said that HDFC Bank had camouflaged ₹45 crore as marketing expenses to pay higher interest to the Maharashtra State Road Development Corporation (MSRDC), the US law firm said in the release.
According to the newspaper, the payments were allegedly meant to compensate MSRDC through "differential interest" on deposits but were routed through the bank's marketing department and shown as sponsorship expenses for road safety campaigns. It added that the arrangement may have breached Reserve Bank of India regulations, which prohibit banks from offering negotiated interest rates to individual depositors.
Following the report, HDFC Bank's ADRs fell $3.98, about 5.1%, to close at $74.10 on 27 May. The lender rejected any suggestion of wrongdoing.
Glancy Prongay & Rotter said it is investigating whether HDFC Bank violated federal securities laws or engaged in other unlawful business practices. It also invited shareholders who suffered losses to contact the firm regarding the investigation.
In his resignation letter dated 17 March, Chakraborty cited “certain happenings and practices within the bank” that were “not in congruence” with his personal values and ethics, without elaborating on the allegations.
In an interview with CNBC-TV18 on 30 March, Chakraborty had hinted that the "mis-selling" of Credit Suisse's perpetual bonds was a bone of contention between him and the bank's management.
The bank has maintained that Chakraborty "did not mention any happenings and practices which were not in congruence with his personal values and ethics".
After Chakraborty's resignation became public and the controversy escalated in late March 2026, HDFC Bank commissioned an independent legal review by US law firm Wilson Sonsini Goodrich & Rosati and Indian law firm Wadia Ghandy & Co.
The review concluded there was no evidence to substantiate Chakraborty's allegations. The external law firms said the contemporaneous evidence they reviewed did not support his claims. The bank did not disclose the review's detailed findings.
Separately, the bank appointed Trilegal and Wadia Ghandy & Co. to examine the minutes of board meetings for any discrepancies that Chakraborty may have referred to, but did not elaborate upon, according to a Mint report.
The Reserve Bank of India has also backed the lender amid the developments. Following Chakraborty's resignation, the central bank said there were “no material concerns on record as regards its conduct or governance”.
In 2020, Mint reported that the US-based Rosen Law Firm announced it was preparing a securities class action on behalf of investors who had purchased HDFC Bank securities.
The proposed action related to allegations that the bank had made false or misleading statements concerning its vehicle loan portfolio, internal controls and financial reporting. Rosen urged investors who had incurred losses to join the proposed class action before a court-appointed lead plaintiff deadline. The matter was based on allegations under US securities laws and did not amount to a finding of wrongdoing against HDFC Bank.
Subhana Shaikh
Subhana Shaikh is a business journalist at Mint, where she covers the Reserve Bank of India, monetary policy, and India’s bond markets. She has seven years of experience in reporting on financial markets, with a focus on banking and the broader financial system.She began her career after completing her postgraduate diploma at the Indian Institute of Journalism and New Media, Bengaluru. She then spent five years at Informist Media, a news wire agency, where she closely tracked bond markets and the BFSI sector, developing a strong foundation in market reporting. She later moved to NDTV Profit, where she expanded her coverage across a wide range of business and economic stories.At Mint, Subhana focuses on explaining central bank decisions, bond market movements, and banking trends for her readers. Her reporting combines on-ground inputs with careful analysis to help audiences understand complex financial developments.Based in Mumbai, she is interested in exploring stories across the business landscape. Outside of work, she enjoys reading and spending time with her three cats.