HDFC Bank denies wrongdoing in Rs 45 crore MSRDC payment case

HDFC Bank rejected allegations of wrongdoing linked to reported payments of Rs 45 crore to MSRDC allegedly routed through its marketing department. The clarification came after media reports on an internal vigilance investigation, while the bank’s shares closed lower on the BSE

New Delhi: HDFC Bank on Wednesday rejected allegations of wrongdoing linked to reported payments worth Rs 45 crore allegedly routed through its marketing department to a Maharashtra government agency.

The bank’s spokesperson, in a statement, said its internal oversight and audit mechanisms are robust and that all matters are handled as per established procedures.

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All issues are dealt with in accordance with the bank’s established norms, and the full process is always followed before a final determination after any internal review, the statement said.

“We strongly reject any assumptions of wrongdoing or culpability based on selective material,” the statement added.

The clarification came after media reports claimed that the bank’s audit committee had initiated a formal internal vigilance investigation into payments totalling Rs 45 crore to Maharashtra State Road Development Corporation (MSRDC) that were allegedly disguised as marketing expenditure.

Shares of HDFC Bank closed at Rs 758.50 apiece, down 2.63 per cent, on the BSE.

According to reports, the payments were allegedly made to a Maharashtra government undertaking just days before former chairman Atanu Chakraborty resigned on March 18.

Chakraborty, in a surprise move, resigned as chairman of HDFC Bank, citing ethical concerns, on March 18.

This was the first time that the part-time chairman of HDFC Bank left midway, raising concerns over its functioning.

In a regulatory filing, HDFC Bank said Chakraborty had tendered his resignation as the part-time chairman and independent director of the bank with immediate effect on March 18.

Chakraborty was appointed part-time chairman with effect from May 5, 2021, almost a year after his retirement as Economic Affairs Secretary.

His term was extended for another three years in 2024 till May 4, 2027.

Chakraborty, a 1985 batch IAS officer of the Gujarat cadre, retired as Secretary of the Department of Economic Affairs in April 2020. Prior to that, he was Secretary of the Department of Investment and Public Asset Management (DIPAM). Both departments come under the Finance Ministry.

Chakraborty became chairman during the reverse merger process of the bank with its parent entity HDFC Ltd, a leading mortgage firm in the country.