More trouble brewing? HDFC Bank fires 3 executives for mis-selling bonds, says report

HDFC Bank has fired its group head of retail branch banking, Sampath Kumar, along with two other senior executives over alleged mis-selling of Credit Suisse‘s additional tier-1 (AT-1) bonds, CNBC-TV18 reported citing sources. This comes after Chairman Atanu Chakraborty’s resignation triggered a massive crash in share price that wiped off Rs 96,000 crore from the stock’s market value in two days.

Harsh Gupta, Executive Vice President, Middle East, Africa and NRI onshore business, and Payal Mandhyan, Senior Vice President, were the two other executives fired by India’s largest private lender, the report further said, adding that Gupta and Mandhyan were suspended in January 2025 as the bank began investigating the allegations in its Dubai branch.

A senior executive of the bank told the business news channel that Gupta and Mandhyan were actively involved in the mis-selling while Kumar was fired as the incident took place under his oversight.

The buyers of these AT-1 bonds, most of whom were of non-resident Indian (NRI) origin, alleged that the bank executives had deceived them into transferring their foreign-currency non-resident (FCNR) deposits from India to Bahrain, CNBC-TV18 reported, quoting an unnamed bondholder as alleging that the staff took his signature on the blank paper in the Bahrain branch.

The Economic Times couldn’t independently verify the report.

The report surfaced during post-market hours of Friday. The stock will be in focus on Monday. Earlier this week, HDFC Bank’s part-time Chairman and independent director Atanu Chakraborty stepped down, stating that he observed certain practices at the company over the last two years that did not align with his personal values and ethics. However, the bank has sought to play down the resignation.

“We confirm that there are no reasons other than those mentioned in the said letter, for the resignation of Mr Chakraborty,” the lender clarified. Keki Mistry, meanwhile, has been appointed as an interim part-time Chairman for a period of three months, as approved by the RBI.

After Chakraborty’s resignation drew massive media attention, Mistry denied speculations around any internal power struggle. “There was no power struggle in the bank. Differences on minor issues come up from time to time. There was no material difference between Atanu and the board,” he said during a conference call.

HDFC Bank shares plunged 7% in two days, wiping off more than Rs 96,000 crore from its market capitalisation and dragging it down to a little over Rs 12 lakh crore.

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