HDFC Bank under US law firms’ scanner over alleged payments; shares fell 3% after May report

“On this news, HDFC Bank’s stock price fell $1.02, or 4.1%, to close at $23.78 per share on May 27, 2026, thereby injuring investors,” as per the release. The bank’s American Depository Shares are listed on the New York Stock Exchange, making it subject to US securities laws.

The investigations surround allegations that the bank’s internal records showed it had made interest payments of Rs 45 crore to the Maharashtra State Road Development Corporation disguised as marketing spend to the Maharashtra State Road Development Corporation (MSRDC) through FY24 and FY25, The Indian Express had reported in May.

HDFC shares fall after allegations, chairman’s resignation

Internal records accessed by the newspaper during the investigation revealed that the payout was approved in the presence of the bank’s Managing Director and Chief Executive Officer, Sashidhar Jagdishan. However, the bank has publicly denied these allegations ever since.

The bank did not respond to a mail sent by The Indian Express on Thursday regarding the US law firms’ investigations till the time of publication.

Earlier, then-Chairman Atanu Chakraborty resigned on March 18, citing certain practices at the bank that were against his “personal values and ethics”.

Both these instances had led to panic in the market, causing shares of the bank to crash, and wiping out a huge chunk of investor wealth. Chakraborty’s abrupt resignation had led to the stock immediately tanking over 5%, while the disguised payments report had sent the stock down by up to 3%.

The Reserve Bank of India (RBI) has maintained its stance that there were no material concerns regarding governance at HDFC Bank. The central bank has reviewed the minutes of the lender’s meeting but did not find anything material, RBI Governor Sanjay Malhotra reiterated at the monetary policy press conference on April 8.