HDFC Bank Faces US Lawsuit, Shares Drop

Aug 27, 2026

57 min

Aug 27, 2026 10:30

HDFC Bank faces class-action lawsuit in US, shares decline

## Allegations Against HDFC Bank

HDFC Bank, a major private lender in India, is facing a class-action lawsuit in New York. The lawsuit accuses the bank of disguising interest payments to the Maharashtra State Road Development Corporation (MSRDC) as marketing expenses. This allegedly allowed the bank to offer a higher interest rate than permitted by regulations.

## Details of the Lawsuit

The lawsuit, filed by investor Jwalant Natvarlal Soneji, targets HDFC's top executives, including CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan. It claims that between 2023 and 2025, HDFC misrepresented approximately 45 crore rupees as marketing expenses to cover up the inflated interest payments.

## Impact on HDFC's Shares

Following the allegations, HDFC's American Depositary Shares (ADS) saw a significant decline. On March 18, 2026, the bank's shares fell by 7.28% after the resignation of Chairman Atanu Chakraborty, who cited ethical concerns. Further revelations led to an additional 4.1% drop in share value.

## Bank's Response

HDFC Bank has dismissed the lawsuit as baseless, stating that such lawsuits are common in the U.S. after stock price drops. The bank intends to defend itself vigorously against the claims.

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