An internal investigation by HDFC Bank Ltd has found evidence that two senior executives disclosed confidential business strategies and potentially market-sensitive information to external parties, Bloomberg reported, citing people familiar with the matter.
The investigation is ongoing as the bank examines whether the information was misused, according to the report. The executives, who oversee key businesses and functions at the lender, have been formally informed of the findings, the people said.
The probe began after some senior leaders raised concerns about possible information leaks. The findings were reported to senior management, including some board members, earlier this year, Bloomberg reported. It remains unclear what disciplinary action, if any, the bank will take against the executives.
An HDFC Bank spokesperson confirmed that an internal review was underway but declined to comment on its findings or the individuals involved.
“In line with our policies, an internal review into this matter is currently underway to gather and evaluate all relevant facts," the spokesperson said in an email. “Appropriate action will be taken based on the findings, once the review is complete."
The bank also reiterated its commitment to maintaining high standards of ethics and governance, adding that it takes reports of potential violations seriously.
HDFC Bank Faces Leadership Transition Amid Internal Challenges
The investigation comes at a critical juncture for HDFC Bank, India’s largest lender by market capitalisation, as it prepares for a leadership transition following a series of senior-level departures and boardroom tensions.
Anup Bagchi, a veteran of the ICICI Group, is set to take over as chief executive officer on October 27, succeeding Sashidhar Jagdishan, who decided against seeking another term after six years in the role.
Kaizad Bharucha, the bank’s deputy managing director and one of its longest-serving executives, has also sought to leave the lender at the end of December, according to the report.
The bank’s leadership transition follows the abrupt resignation of former chairman Atanu Chakraborty in March. Chakraborty cited differences between his personal values and certain practices at the bank. HDFC Bank subsequently commissioned an independent legal review, which concluded that his concerns were not substantiated.
The latest findings from the internal probe add to the scrutiny facing the lender as it seeks to maintain investor confidence during the transition.
HDFC Bank’s Reputation Under Scrutiny
Founded in 1994, HDFC Bank expanded rapidly as India opened its financial sector to private competition. Over the years, it became a preferred investment for international fund managers seeking exposure to India’s rising incomes and expanding consumer credit market.
The bank, valued at about $115 billion, has built its reputation on conservative management, internal controls and consistent profitability. However, its shares have declined around 28% this year, according to the report.
The ongoing investigation raises questions about the handling of confidential information within the organisation, although the bank has yet to complete its review or determine whether the disclosures resulted in any misuse.
HDFC Bank has not publicly disclosed the identities of the executives involved or detailed the nature of the information allegedly shared.
Source: News18