HDFC Bank delayed action in AT-1 bond mis-selling: Atanu Chakraborty

HDFC Bank delayed taking action against officials involved in the mis-selling of additional tier 1 bonds to investors in Dubai, Atanu Chakraborty, the former chairman of the lender, told CNBC-TV18 in an interview broadcast on Monday.

 

Chakraborty abruptly resigned from the bank's board earlier this month, citing differences over "values and ethics" and triggering a stock selloff and a damage control exercise by the lender.

 

HDFC Bank terminated three senior executives this month, following an internal investigation into the alleged mis-selling of Credit Suisse's AT-1 bonds to non-resident Indian clients through its Dubai and Bahrain branches, according to an exchange notification dated March 23.

   

The move came after the Dubai Financial Services Authority imposed restrictions on the bank's branch, preventing it from adding new clients or offering new financial services from September 26, 2025.

 

Chakraborty told CNBC-TV18 that the mis-selling of AT-1 bonds through the Dubai branch posed significant reputational risks, although it was initially viewed as a technical lapse in documentation.

 

"While the issues have been addressed, there has been involuntary separation of three senior (executives) that has been reported, as well as 12 other people punished from major penalties to minor penalties," Chakraborty said.

 

"Something goes on for eight years, and suddenly we take an action," he said.

 

Chakraborty said that the re-appointment of current HDFC Bank CEO Sashidhar Jagdishan was not taken up during his tenure as chairman or as part of the nomination and remuneration committee.

 

The bank has not specified the reason for Chakraborty's resignation.