HDFC Bank Faces Securities Class Action Over Hidden Payment Scheme

The lawsuit, pending in the U.S. District Court for the Southern District of New York, centers on claims that HDFC Bank and its executives withheld material information from shareholders. According to reports from The Indian Express, the bank allegedly masked Rs 45 crore—approximately $4.7 million—as marketing expenses. These funds were reportedly used to provide above-market interest rates to the Maharashtra State Road Development Corporation (MSRDC).

Court documents detail that HDFC offered MSRDC a 6.01% interest rate, a premium 2.51 percentage points higher than standard rates, by labeling the difference as sponsorship for a road safety initiative. An internal investigation conducted in early 2026 reportedly identified over ten senior officials involved in the arrangement, including CEO Sashidhar Jagdishan. Following the disclosure of these practices on May 27, 2026, HDFC shares dropped $1.02, closing at $23.78 on heavy trading volume. The firm Kahn Swick & Foti, LLC is currently representing investors seeking recovery for losses incurred during the period.