Why have three law firms launched a probe against HDFC Bank?

HDFC Bank seems to be under a fresh examination, this time in the United States, after three law firms said they would probe whether there had been any possible violation of federal securities laws.
 
“Glancy Prongay Wolke & Rotter LLP, a leading national shareholder rights law firm, today announced that it has commenced an investigation on behalf of HDFC Bank Limited investors concerning the company’s possible violations of the federal securities laws,” the law firm said in a release dated July 22.
 
Separately, the law offices of Howard G. Smith issued a statement announcing a similar investigation. The law offices of Frank R. Cruz have also announced an investigation on behalf of HDFC Bank’s investors.
 
Why is the bank facing this scrutiny?
 
The issue dates back to May 27, 2026, when the Indian Express newspaper published a report alleging that the country’s largest private sector lender had made payments worth Rs 45 crore to Maharashtra State Road Development Corporation (MSRDC) as higher interest for their deposits and that this was disguised under marketing budgets and sponsorships for a road safety drive.      
 
According to the law firms, HDFC Bank’s stock price declined $1.02, or 4.1%, to close at $23.78, following the news, thereby “injuring investors.” HDFC Bank’s American Depository Receipts (ADRs) are listed on the NYSE.
 
The law firms have urged investors who incurred a loss in HDFC Bank to contact them about potentially pursuing claims to recover the loss.
 
What has HDFC Bank said on the MSRDC matter?
 
HDFC Bank had denied any wrongdoing and stated following the report that it continued to maintain sound financial and risk management practices, with robust systems of internal control and oversight.
 
“We wish to state that in line with the highest corporate governance standards of the bank, the internal audit function conduct reviews, identifies and presents its observations from time to time. As such, the observations of internal audit function are comprehensively addressed by the bank and that applies to the matter in question,” it had said.
 
It had further stated that the matter would not have a material impact on the financial statements.
 
HDFC Bank has been under scrutiny this year, after Atanu Chakraborty suddenly resigned as the part-time chairman in March 2026 citing certain practices in the bank were not in congruence with his personal values and ethics.
 
An independent legal review into the concerns flagged in Chakraborty’s resignation letter later found no evidence to substantiate his claims.
 
HDFC Bank recently appointed Rajiv Kumar, former chief election commissioner and ex-finance secretary as its new part-time chairman.
 
HDFC Bank shares declined 0.68% to Rs 748 on the BSE on Thursday, July 23. Year-to-date the stock is down around 24%.