HDFC Bank shares fell nearly 2% after ₹45-crore payment probe report.
Internal vigilance review reportedly examined MSRDC-linked transactions and executive accountability.
Governance concerns intensified as HDFC Bank reportedly sought chairman-term extension.
HDFC Bank Shares Fall 2% Amid Report Of Internal Vigilance Probe
Report said bank investigated ₹45-crore 'differential interest' payments linked to MSRDC and identified accountability among senior executives
HDFC Bank
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Shares of HDFC Bank fell nearly 2% on Wednesday after a report by The Indian Express said the lender had carried out an internal vigilance investigation into ₹45 crore worth of "differential interest" payments made to the Maharashtra State Road Development Corporation (MSRDC).
According to NSE data, HDFC Bank shares were trading at ₹763.80, down ₹15.10 or 1.94%, at 9:35 am. The report weighed on investor sentiment and triggered selling pressure in the stock during early trade.
As per the Indian Express report published on Wednesday, the internal vigilance investigation examined ₹45 crore worth of payments made to MSRDC and reportedly identified accountability among several senior executives, including Managing Director and CEO Sashidhar Jagdishan.
The investigation was initiated shortly before former chairman Atanu Chakraborty resigned on March 18. Chakraborty had cited "certain happenings and practices within the bank" that were not in "congruence" with his personal values and ethics.
According to the media report, HDFC Bank’s Audit Committee of the Board ordered the probe on March 12 after an internal audit of the bank's marketing department flagged the transactions and reportedly rated the department's functioning as "unsatisfactory".
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The report further stated that the payments were allegedly structured as "differential interest" on MSRDC deposits. Instead of being credited directly as interest payments, the amount was allegedly routed through the bank’s marketing department and shown as contributions towards a road safety awareness campaign through four local vendors.
Chairman Extension Report
Separately, The Economic Times reported on 19 May that HDFC Bank is seeking a 90-day extension from the Reserve Bank of India for interim part-time chairman Keki Mistry, whose current term ends on June 18.
According to the report, the bank's board and senior management want to wait for the outcome of an ongoing legal review before appointing a full-time chairman.
"The view within the bank is that initiating the process for appointing a new chairman before the review concludes could be premature and may complicate governance discussions currently underway," a bank official told the publication.
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The report added that Mistry is unlikely to continue beyond his transitional role despite the board seeking an extension