Mumbai: HDFC Bank has imposed a monetary penalty of Rs 1 lakh each on its Managing Director & CEO Sashidhar Jagdishan, Chief Financial Officer Srinivasan Vaidyanathan, and Group Head – Retail Assets Arvind Vohra, along with warning letters, following the conclusion of an internal review into the bank's arrangement with Maharashtra State Road Development Corporation (MSRDC) for garnering deposits in 2017 and 2021.

This is the first such significant decision by the Board of Directors since new part-time chairman Rajiv Kumar was appointed.

In a filing to stock exchanges, the bank said the Board, at its meeting held on July 23, 2026, concluded — based on the findings and recommendations of the Special Disciplinary Committee of Independent Directors — that the conduct of the employees involved constituted "business overreach" rather than any mala fide action, personal enrichment, or improper motive.

However, "keeping in view any potential divergence with the applicable RBI Directions" and based on the Committee's recommendations, the Board decided to issue warning letters and a monetary penalty of Rs 1 lakh each for the three senior employees named — the MD & CEO, CFO, and Group Head – Retail Assets — along with warning letters for the remaining employees involved.

The Board has also directed that the matter be communicated to the Reserve Bank of India.

The case stems from an investigative report, which alleged that HDFC Bank had made payments to Maharashtra's road development corporation to attract large deposits from the state agency. According to the report, the payments were booked as marketing expenses to make it appear the money was being spent to incentivise the department to park funds with the bank, rather than disclosed as what they allegedly were. The lender had, however, strongly denied allegations of wrongdoing at the time.

"The bank has robust internal oversight, audit and control processes and systems. All issues are dealt with in accordance with the bank's established norms, and full process is always followed before final determination post any internal review. We strongly reject any assumptions of wrongdoing or culpability based on selective material," the bank had said in a statement on May 27.