HDFC Bank benches execs amid regulatory fallout

ALLEGED MIS-SELLING OF CREDIT SUISSE SECURITIES BEING PROBED

- FE BUREAU

HDFC BANK HAS placed two senior executives on gardening leave amid an internal probe into the alleged mis-selling of Credit Suisse’s Additional Tier 1 (AT1) bonds, according to Bloomberg.

The move, confirmed by sources familiarwith the matter, comes as the bank faces mounting scrutiny from regulators. While the bank has refrained from making public statements, insiders maintain that the decision to sideline the executives was precautionary.

On September 25, Dubai Financial Services Authority (DFSA) issued an order restraining HDFC Bank’s DIFC branch from onboarding new clients or promoting financial services. The DFSA cited lapses in the bank’s onboarding and advisory processes, though it stopped short of directly linking the action to the AT1 bond controversy.

Sources within HDFC Bank acknowledge that the regulatory clampdown is a direct consequence of the Credit Suisse bond fallout. They said the bank is fully cooperating with the DFSA and has halted all new client acquisition, while continuing to service existing customers.