HDFC Bank shares edge slightly higher despite report of investor complaints over Carlisle product

Shares of HDFC Bank Ltd. were trading slightly higher on Wednesday despite a media report that a group of investors who bought Carlisle's life settlement product through the bank's Dubai operations plans to write to the Prime Minister's Office this week, alleging mis-selling, substantial losses and years-long denial of redemption. 

The stock has declined 27% so far in 2026. Over the past year, shares of the country's most-valued private-sector lender have also delivered a negative return of 27%, retreating from their 52-week high of ₹1,020.35, touched on October 23, 2025. 

At 11:40 am, shares of HDFC Bank were trading at ₹728.95 on the BSE, up 0.32%, or ₹2.35, from the previous close. 

What is the allegation?

According to the media report, the group comprises more than 75 investors and represents over $13.5 million in principal investment in Carlisle's Luxembourg Life Fund. The investors are consolidating their complaints and exploring legal action against HDFC Bank over alleged client-suitability lapses. 

As per reports, the dispute centres on Carlisle’s life settlement product, which investors allege was marketed as a capital-protection or insurance-linked investment offering attractive historical returns.

Hitesh Bhatia, a Dubai-based former banker who invested in the fund in 2019, said the investor group intends to raise concerns over client suitability at HDFC Bank’s Dubai operations, as well as issues surrounding leverage, disclosures, losses and liquidity.

According to investor claims cited in media reports, some clients were presented with the product as a capital-protection investment offering historical or projected annual returns of around 12–19%. Investors allege that leverage provided alongside the investment increased their exposure and magnified losses during the market disruption caused by Covid-19. One investor cited in the report alleged that HDFC Bank offered leverage of three to five times the amount of deposits placed with the bank for investments in the products.

Earlier, addressing shareholders at the bank's 32nd Annual General Meeting, Rajiv Kumar had said HDFC Bank's governance framework and internal control systems remain robust and would be further strengthened to preserve stakeholder confidence. 

"The Bank's ethos and internal control systems are strong. I assure you that these will be further strengthened and empowered," Kumar said. 

Meanwhile, in another development, HDFC Bank said earlier this week that the Reserve Bank of India, through a letter dated August 19, had approved Life Insurance Corporation of India's application to acquire an aggregate holding of up to 9.99% in the bank. 

LIC held a 4.11% stake in HDFC Bank as of August 14, according to the lender. The RBI's approval is subject to applicable banking, foreign exchange and securities market regulations. 

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