HDFC Bank, India's largest private sector lender, is facing fresh scrutiny in the United States as three prominent law firms announced investigations into potential violations of federal securities laws. The probes by Glancy Prongay Wolke & Rotter LLP, the Law Offices of Howard G. Smith, and the Law Offices of Frank R. Cruz were initiated following a news report that allegedly impacted the bank's stock price.
The investigations stem from a May 27, 2026, report by the Indian Express newspaper. This report alleged that HDFC Bank made payments totaling Rs 45 crore to the Maharashtra State Road Development Corporation (MSRDC). These payments, described as higher interest for deposits, were reportedly disguised under marketing budgets and sponsorships for a road safety initiative. Following this news, HDFC Bank's American Depository Receipts (ADRs), listed on the NYSE, saw a decline of $1.02, or 4.1%, closing at $23.78, which the law firms claim injured investors.
Law Firms Urge Affected Investors to Contact Them
The US law firms have issued statements encouraging investors who suffered losses in HDFC Bank's stock to contact them. They are exploring potential claims to recover these losses, focusing on whether the bank's actions constituted a breach of federal securities regulations.
HDFC Bank Denies Wrongdoing
In response to the allegations and subsequent probes, HDFC Bank has vehemently denied any wrongdoing. The bank stated that it maintains sound financial and risk management practices, supported by robust systems of internal control and oversight. It further clarified that its internal audit function regularly conducts reviews and addresses observations, including those related to the MSRDC matter, asserting that the issue would not materially impact its financial statements.
Previous Scrutiny and Leadership Changes
This is not the first time HDFC Bank has faced close examination recently. Earlier in March 2026, Atanu Chakraborty resigned as the part-time chairman, citing that certain bank practices were not aligned with his personal values and ethics. Although an independent legal review later found no evidence to substantiate his claims, the incident highlighted a period of internal scrutiny. Recently, the bank appointed Rajiv Kumar, former chief election commissioner, as its new part-time chairman.
As of July 23, 2026, HDFC Bank shares on the BSE declined by 0.68% to Rs 748, with the stock down approximately 24% year-to-date.