HDFC Bank chair says lender delayed action on bond sales
Former chairman Atanu Chakraborty says HDFC Bank delayed action on AT-1 bond mis-selling for eight years. The lender recently fired three senior executives.
The former chairman of India's HDFC Bank has alleged that the financial institution delayed taking necessary action against staff involved in the mis-selling of additional tier 1 (AT-1) bonds. Atanu Chakraborty, who resigned from the board earlier this month citing ethical concerns, stated in an interview with CNBC-TV18 that the bank's response to the situation in the United Arab Emirates was overdue.
The controversy involves the sale of Credit Suisse AT-1 bonds to non-resident Indian clients through the bank's branches in Dubai and Bahrain. An internal investigation led to the termination of three senior executives and penalties for 12 other employees. This internal cleanup followed a move by the Dubai Financial Services Authority to restrict the bank's local operations, preventing it from adding new clients or launching new services starting in September 2025.
Chakraborty noted that while the mis-selling was initially characterized as a technical error in documentation, it posed a significant risk to the bank's reputation. He questioned why it took nearly a decade for the institution to address the ongoing issues.
"Something goes on for eight years, and suddenly we take an action," Chakraborty said.
The former chairman's departure triggered a selloff in the bank's shares and forced the lender into a damage control phase. Chakraborty also clarified that the reappointment of HDFC Bank CEO Sashidhar Jagdishan was not discussed during his tenure as chairman or as a member of the nomination and remuneration committee. The bank has yet to provide a formal reason for Chakraborty's resignation.
