HDFC Bank fires 3 senior officials for gaps in client onboarding at its DIFC branch

Days after the resignation of HDFC Bank chairman Atanu Chakraborty citing ethical concerns, the bank has terminated the services of three employees for gaps in client onboarding at its Dubai International Financial Centre (DIFC) branch.

According to sources, HDFC Bank has fired three senior executives over the alleged mis-selling of Credit Suisse’s additional tier-1 (AT-1) bonds.

Following the allegations of mis-selling, the local regulator — Dubai Financial Services Authority — barred HDFC Bank from onboarding new customers at its DIFC branch last September.

When approached for a comment, the bank said in a statement that it has identified certain gaps in client-onboarding requirements at its DIFC branch in the United Arab Emirates (UAE) and completed a detailed and objective review of the matter.

“Appropriate remedial actions have been taken in line with internal policies. Personnel changes have been undertaken along with appropriate action as per the bank’s conduct regulation,” it said.

The HDFC Bank has well-established governance frameworks and continues to remain committed to maintaining high standards of compliance and regulatory adherence, it added.

Mr. Chakraborty abruptly resigned as the chairman of the country’s second-biggest lender, citing ethical concerns, effective March 18.

This is the first time that a part-time chairman of HDFC Bank left mid-way, raising concerns over the bank’s functioning.

“Certain happenings and practices within the bank, that I have observed over last two years, are not in congruence with my personal values and ethics. This is the basis of my aforementioned decision,” Mr. Chakraborty said in his resignation letter dated March 17.

In the letter addressed to the chairman of the Goverance, Nomination, Remuneration Committee, H.K. Bhanwala, Mr. Chakraborty said, “there are no other material reasons for my resignation other than those stated above”.

Mr. Chakraborty was appointed as the part-time chairman of the bank effective May 5, 2021, almost a year after he retired as the economic affairs secretary.

His term was extended for another three years in 2024, till May 4, 2027.

Mr. Chakraborty, a 1985-batch IAS officer of the Gujarat cadre, retired as the secretary of the Department of Economic Affairs in April 2020. Prior to that, he was the secretary of the Department of Investment and Public Asset Management (DIPAM). Both departments are under the Finance Ministry.

Mr. Chakraborty became the chairman during the reverse merger process of the bank with the parent entity, HDFC Limited, a leading mortgage firm in the country.

The merger of HDFC Limited with HDFC Bank became effective on July 1, 2023, creating a financial behemoth with a combined balance sheet of more than ₹18 lakh crore.