HDFC Bank Faces Securities Fraud Lawsuit Over Alleged Deposit Scheme

The lawsuit, covering the period between July 17, 2023, and May 26, 2026, targets top leadership including CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan. Plaintiffs allege that the bank funneled approximately 45 crore rupees—roughly $4.7 million—to the Maharashtra State Road Development Corporation to secure large deposits. To circumvent interest rate caps, management reportedly routed these payments through the marketing department, framing them as sponsorships for a road safety campaign rather than interest expenditures.

These practices allegedly resulted in overstated financial reports and internal control failures. The scheme began to unravel in March 2026 when Independent Director Atanu Chakraborty resigned, citing practices that were not in congruence with his personal ethics, triggering a 7.28% drop in American Depositary Shares. Subsequent reports in The Indian Express detailed an internal vigilance probe, causing further market volatility.

Reed Kathrein, the partner at Hagens Berman leading the investigation, stated that the firm is focused on how leadership allegedly concealed these payments while maintaining a public facade of strong corporate governance. Investors who incurred significant losses during the designated class period have until October 13, 2026, to file for lead plaintiff status. The firm is also encouraging whistleblowers with non-public information regarding the bank’s operations to come forward.