HDFC Bank executives, including CEO Sashidhar Jagdishan, have been fined ₹1 lakh each following an investigation into a differential interest case with the Maharashtra State Road Development Corporation (MSRDC). The bank was found to be offering an unusually high interest rate on deposits to MSRDC, a practice that contravened Reserve Bank of India (RBI) guidelines. The levied penalties have drawn criticism on social media for being insufficient given the scale of the regulatory breach and financial implications.

HDFC Bank executives, including CEO Sashidhar Jagdishan, have been fined ₹1 lakh each following an investigation into a differential interest case with the Maharashtra State Road Development Corporation (MSRDC). The bank was found to be offering an unusually high interest rate on deposits to MSRDC, a practice that contravened Reserve Bank of India (RBI) guidelines. The levied penalties have drawn criticism on social media for being insufficient given the scale of the regulatory breach and financial implications.

HDFC Bank executives, including CEO Sashidhar Jagdishan, have been fined ₹1 lakh each following an investigation into a differential interest case with the Maharashtra State Road Development Corporation (MSRDC). The bank was found to be offering an unusually high interest rate on deposits to MSRDC, a practice that contravened Reserve Bank of India (RBI) guidelines. The levied penalties have drawn criticism on social media for being insufficient given the scale of the regulatory breach and financial implications.

Housing Development Finance Corporation (HDFC) on Monday announced that its Chief Executive Officer (CEO) Sashidhar Jagdishan, Chief Financial Officer (CFO) Srinivasan Vaidyanatha and group head Arvind Vohra have been fined ₹1 lakh each. The move is the much-awaited corrective action for a ₹45 crore differential interest case involving the Maharashtra State Road Development Corporation (MSRDC).

An Indian Express report claimed that the HDFC bank was returning an interest rate of 6.01 per cent to the MSRDC, which is far above the general 3.5 per cent rate. In exchange for a higher interest rate, the bank secured large deposits of around ₹20,000 crore from the MSRDC. This violated RBI’s Master Directions, which state clear guidelines against the negotiation of deposit interest rates with individual investors.

An amount of ₹45 crore paid as interest to the state-owned corporation during FY 2024 and FY 2025 was disguised corporate sponsorship for a road-safety awareness campaign run by MSRDC, rather than being credited as direct interest.

In response to the crisis, the private lender conducted an internal probe. According to the investigation, there was no malicious intent or personal motives behind the employee’s actions. The bank said that it was a case of business overreach and that only monetary compensation was required.

“..The Board decided to issue warning letters and a monetary penalty of ₹1 lakh for three senior employees (the Managing Director & CEO, Chief Financial Officer and Group Head — Retail Assets), and warning letters for the remaining employees”, the bank said in a public statement.

The announcement has garnered criticism on social media. Users are disappointed that the level of disciplinary action taken does not compare to the severity of the crisis.

The morning trade on Tuesday, after the announcement, reflects the market investor sentiment. Shares are trading around ₹732 at 10:10am, after it closed at ₹739 yesterday. The price comes close to its 52-week low of ₹726.65.

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