The complaint, filed by the firm Hagens Berman, targets CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan. It alleges the bank funneled approximately Rs 45 crore—roughly $4.7 million—to the Maharashtra State Road Development Corporation. By disguising these payments as sponsorship for road safety campaigns, management reportedly circumvented Reserve Bank of India regulations to provide the state firm with a 6.01% interest rate, significantly higher than standard retail offerings.
HDFC Bank Faces Class Action Over Alleged Marketing Payment Scheme
Investors who suffered losses in HDFC Bank Limited between July 2023 and May 2026 face an October 13 deadline to join a securities fraud class action. The lawsuit alleges that senior leadership orchestrated a scheme to mask illegal interest rate payments as marketing expenses to secure state-firm deposits.
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These practices surfaced throughout the spring of 2026. On March 18, 2026, the sudden resignation of Chairman Atanu Chakraborty, who cited a lack of congruence with his personal ethics, triggered a 7.28% drop in American Depositary Shares. The situation intensified on May 27, 2026, following an investigative report by The Indian Express, which linked the marketing expenditures to an internal vigilance probe. HDFC shares fell an additional 4.1% following that disclosure. Hagens Berman partner Reed Kathrein is now leading the investigation into whether the bank misled shareholders regarding its governance and financial controls during the three-year class period.
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