A federal securities class action lawsuit in New York has named HDFC Bank, CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan over allegations involving payments linked to MSRDC deposits.
The complaint represents investors who purchased HDFC Bank’s American Depositary Shares between July 17, 2023 and May 26, 2026.
Highlights
- HDFC Bank and two top executives face a federal securities class action lawsuit in New York.
- CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan have been named in the complaint.
- The lawsuit alleges payments linked to MSRDC deposits were disguised as marketing expenses.
- Around ₹45 crore in differential interest was allegedly routed between 2023 and 2025.
- The complaint covers investors who bought HDFC Bank ADS between July 17, 2023 and May 26, 2026.
- Plaintiffs allege the bank’s disclosures to US investors were materially false or misleading.
- HDFC Bank’s US-listed ADRs came under pressure after details of the lawsuit emerged.
HDFC Bank and two of its top executives are facing a federal securities class action lawsuit in the United States over allegations involving payments made in connection with deposits from the Maharashtra State Road Development Corporation (MSRDC).
The complaint has been filed in the US District Court for the Southern District of New York by investor Jwalant Natvarlal Soneji. It names HDFC Bank, Chief Executive Officer Sashidhar Jagdishan and Chief Financial Officer Srinivasan Vaidyanathan as defendants.
The action has been brought on behalf of investors who purchased HDFC Bank’s American Depositary Shares (ADS) between July 17, 2023 and May 26, 2026.
According to the complaint, the bank allegedly offered MSRDC an effective interest rate of 6.01% on its deposits, compared with a standard savings rate of 3.5%. The lawsuit alleges that the difference was routed through another mechanism because negotiated returns to individual depositors are restricted under banking rules.
Around ₹45 crore in differential interest was allegedly routed between 2023 and 2025 and recorded as marketing expenditure associated with a road-safety awareness campaign run by MSRDC through third-party vendors.
The lawsuit further claims that an internal vigilance investigation found the arrangement violated RBI directions and the bank’s internal anti-bribery policies. These remain allegations made in the complaint.
The plaintiffs have also questioned disclosures made by HDFC Bank to US investors. They allege that statements in the bank’s Form 20-F filings concerning the effectiveness of internal financial reporting controls were materially false or misleading because the alleged arrangement had not been adequately disclosed.
The complaint also links investor losses to developments earlier this year. HDFC Bank Chairman Atanu Chakraborty resigned on March 18, citing certain happenings and practices within the bank that were not aligned with his personal values and ethics. HDFC Bank’s US-traded shares subsequently fell sharply.
Further pressure followed reports in May detailing an internal investigation into the MSRDC-related payments.
The plaintiffs have alleged violations of Sections 10(b) and 20(a) of the US Securities Exchange Act of 1934. They are seeking class certification, compensatory damages and a jury trial.
HDFC Bank’s American Depositary Receipts were trading around 0.87% lower at $23.43 after details of the lawsuit emerged.
