HDFC Bank faces allegations over Rs 45 crore payments routed via marketing budget: Report

According to a report by The Indian Express, the payment was allegedly meant to compensate MSRDC with “differential interest” on its deposits

by e4m Staff
Published: May 27, 2026 7:32 PM | 2 min read

HDFC Bank is under scrutiny for allegedly routing Rs 45 crore in payments to the Maharashtra State Road Development Corporation (MSRDC) through its marketing budget instead of directly as interest payments.
The issue was flagged during an internal audit of the bank's marketing department for FY24 and FY25, which rated the department's performance as "unsatisfactory" and prompted a formal internal vigilance investigation.
Allegations suggest that the payments were disguised as contributions to a road safety campaign, with senior officials, including MD & CEO Sashidhar Jagdishan, reportedly involved in discussions about structuring the compensation.
The internal vigilance report indicated a lack of formal documentation and compliance, exposing the bank to various risks, and was submitted to the bank's Audit and Nomination and Remuneration Committees in April.

HDFC Bank is facing allegations over payments worth Rs 45 crore made to the Maharashtra State Road Development Corporation (MSRDC), which were allegedly routed through the bank’s marketing budget instead of being directly accounted for as interest payments, according to a report by The Indian Express.

The issue reportedly surfaced after an internal audit of the bank’s marketing department for FY24 and FY25 flagged the transactions and rated the department’s performance as “unsatisfactory”. Following the audit findings, the bank’s Audit Committee reportedly ordered a formal internal vigilance investigation on March 12.

The Indian Express report stated that the payments were allegedly meant to compensate MSRDC with “differential interest” on its deposits. However, instead of crediting the amount directly as interest income, the payments were allegedly channelled through vendors under the guise of contributions towards a road safety awareness campaign.

The report further claimed that senior-level discussions involving HDFC Bank MD & CEO Sashidhar Jagdishan included verbal approval of a higher return structure for MSRDC. Multiple officials reportedly told investigators that Jagdishan participated in discussions on how the compensation could be structured through the marketing budget.

Chief Marketing Officer Ravi Santhanam, in his testimony cited by the report, allegedly acknowledged that the marketing department acted as a “facilitator to camouflage differential interest reimbursement as marketing spend”. He also reportedly stated that part of the expenditure was used for actual marketing activities to make the transactions appear legitimate and described the arrangement as a “one-off case”.

The vigilance report also reportedly named CFO Srinivasan Vaidyanathan and several other senior officials, saying the arrangement lacked formal documentation, compliance review and internal approval processes.

The report added that the findings were submitted to the bank’s Audit Committee and Nomination and Remuneration Committee in April. It concluded that the mechanism fell outside approved governance practices and exposed the bank to regulatory, operational and reputational risks.

The developments come weeks after former HDFC Bank chairman Atanu Chakraborty resigned, citing concerns over certain practices within the bank that were not aligned with his personal ethics and values.

Earlier, the Reserve Bank of India had stated that it had no material concerns regarding the bank’s governance. HDFC Bank, RBI and MSRDC did not respond to queries from The Indian Express at the time of publication.