Sebi issues warning letter to HDFC Bank for regulatory non-compliance

HDFC Bank said that it will take necessary steps to address the concerns and directives mentioned in the letter

The Securities and Exchange Board of India (Sebi) issued an administrative warning letter to HDFC Bank regarding non-compliance with multiple regulations. In an exchange filing on Thursday, the bank said that Sebi claimed non-compliance with the following regulations:

 

While the bank stated that the warning would not impact its financial or operational activities, it assured stakeholders that necessary corrective measures will be undertaken to address Sebi’s observations.

 

What are the 3 regulations flagged by Sebi?

Sebi (Merchant Bankers) Regulations, 1992

 

This regulation governs the registration, operations, and responsibilities of merchant bankers in India. The regulations require merchant banks to adhere to a strict code of conduct, avoid conflicts of interest, and ensure investor protection.

 

Sebi (Issue of Capital and Disclosure Requirements) Regulations, 2018

 

This regulation emphasises due diligence, transparency, and compliance in public issue management.

 

Sebi (Prohibition of Insider Trading) Regulations, 2015

 

This regulation is in place to prevent insider trading in the securities market. It prohibits insiders - including employees, directors, or anyone with access to unpublished price-sensitive information (UPSI) - from trading based on such information.

 

HDB Financial Services files for Rs 12,500 crore IPO

In October this year, HDB Financial Services, the non-banking financial subsidiary of HDFC Bank, filed for an initial public offering (IPO) worth up to Rs 12,500 crore. This includes a stake sale by HDFC Bank of up to Rs 10,000 crore and fresh share issue by HDB Financial for up to Rs 2,500 crore.

 

This IPO marks HDFC Bank's first public float in six years, aligning with regulatory mandates that require large non-banking financial companies (NBFCs) to list by September 2025. 

 

HDFC crosses Rs 14 trillion mkt cap

On November 28, HDFC Bank’s market capitalisation crossed Rs 14 trillion for the first time, driven by a nearly 20 per cent surge in its stock price over the past six months. 

 

Following news of the Sebi warning, shares of the bank have slipped by 0.53 per cent to Rs 1,853.65  as of 1:45 pm.