HDFC Bank calls US class-action lawsuit filed against bank 'without merit'

Investor concerns continue to weigh on HDFC Bank’s stock. In August, investor Jwalant Natvarlal Soneji filed a securities fraud class-action complaint against HDFC Bank CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan.

The complaint filed is on behalf of a group of investors, seeking compensation due to losses they suffered after buying HDFC American Depository Shares (ADS) between 2023 and 2026.

US-based law firm Glancy Prongay Wolke & Rotter Llp had filed the petition on August 13 in the US District Court for the Southern District of New York.

On August 27, HDFC Bank in a statement said, "In the United States, these types of shareholder lawsuits are incredibly common after a company experiences a stock fall, and many companies listed in the U.S. routinely defend these lawsuits each year. The bank believes the lawsuit is without merit and intends to vigorously defend itself."

On Thursday, reacting to the latest news, the HDFC Bank stock fell as much as 2.23% intraday to ₹710 at the BSE, before closing at ₹714.45, still down 1.75% over the previous close.

The investors have said that HDFC Bank made misleading information and did not disclose important information relating to business developments. Key to this latest development is the May 27 development, where HDFC Bank had allegedly worked out a scheme to pay a state infrastructure firm a higher interest rate on deposits, compared to other investors.

The complaint filed specifically says the defendants failed to disclose to investors that HDFC Bank camouflaged payments as marketing spend to pay higher interest to the Maharashtra State Road Development Corporation (MSRDC) in order to induce deposits and that these activities were approved by senior management.

The Indian Express newspaper had on May 27 reported this news, stating that the audit committee of the Board (ACB), under the chairmanship of M.D. Ranganath, had ordered a formal “internal vigilance investigation” into payments totalling ₹45 crore made to the MSRDC during FY2024 and FY2025.

The amount instead of being credited directly to MSRDC’s account as interest earned were routed through the bank’s marketing department, disguised as contributions to a road safety awareness campaign through four local vendors,” the newspaper reported in May 2026.

At the time when the news broke, HDFC Bank said its internal oversight and audit mechanisms are robust and that all matters are handled as per established procedures.

“The bank has robust internal oversight, audit and control processes and systems. All issues are dealt with in accordance with 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 said in its statement.