HDFC Bank Faces Securities Fraud Lawsuit Over Hidden Payment Scheme

The litigation, filed by Hagens Berman, targets top leadership including CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan. Plaintiffs claim the bank secretly paid approximately Rs 45 crore—roughly $4.7 million—to the Maharashtra State Road Development Corporation (MSRDC). To bypass Reserve Bank of India interest rate regulations, management allegedly funneled these funds through marketing budgets, labeling them as sponsorship for road safety campaigns to effectively provide MSRDC with an above-market 6.01% interest rate.

These practices surfaced in stages, triggering significant stock volatility. The instability became public on March 18, 2026, when independent director Atanu Chakraborty resigned, citing practices that were not in congruence with his personal values. The stock fell 7.28% following his departure. Further pressure mounted on May 27, 2026, after an investigative report revealed an internal vigilance probe into the leadership’s conduct, causing shares to drop an additional 4.1% to $23.78.

Reed Kathrein, the partner at Hagens Berman leading the investigation, contends that the bank’s senior leadership painted a false picture of strong governance while concealing these payments. Investors who suffered losses during the specified class period have until October 13, 2026, to apply for lead plaintiff status. The firm is also encouraging whistleblowers with non-public information to come forward, citing potential rewards under SEC programs.