New Delhi, Jul 27 (PTI) The board of HDFC Bank has imposed a monetary penalty of Rs 1 lakh on the bank's three top executives -- Managing Director and CEO Sashidhar Jagdishan, Chief Financial Officer (CFO) Srinivasan Vaidyanathan and Group Head (Retail Assets) Arvind Vohra -- for divergence from RBI direction in the Maharashtra State Road Development Corporation (MSRDC) case.

Besides, warning letters were issued to the remaining employees involved in the case related to garnering large deposits from MSRDC between 2017 and 2021 by allegedly paying about Rs 45 crore under the marketing spends head.

The action comes soon after the appointment of former Chief Election Commissioner and Finance Secretary Rajiv Kumar as part-time chairman of the bank.

Reserve Bank approved Kumar's three-year appointment as chairman of the bank effective from July 15, 2026.

HDFC Bank in a regulatory filing said based on the findings and recommendation of the Special Disciplinary Committee of Independent Directors, the board at its meeting held on July 23, 2026, concluded that the conduct of the employees involved constituted business overreach rather than any mala fide action, personal enrichment, or improper motive.

"However, keeping in view any potential divergence with the applicable RBI Directions and based on the recommendations of the Special Disciplinary Committee of Independent Directors, the board decided to issue warning letters and monetary penalty of Rs 1 lakh for three senior employees (the Managing Director & CEO, Chief Financial Officer and Group Head – Retail Assets), and warning letters for the remaining employees," it said.

The board further directed that the matter be communicated to the Reserve Bank of India, it said.

Rejecting any wrongdoing in the matter, HDFC Bank's spokesperson in May had said its internal oversight and audit mechanisms are robust and that all matters are handled as per established procedures.

All issues are dealt with in accordance with the bank’s established norms, and the full process is always followed before final determination post any internal review, the spokesperson had said in a statement.

"We strongly reject any assumptions of wrongdoing or culpability based on selective material," the statement added.

The clarification was issued after media reports claimed that the bank’s audit committee had initiated a formal ‘internal vigilance investigation’ into payments totalling Rs 45 crore to MSRDC that were allegedly disguised as marketing expenditure. PTI DP DP MR

RBI direction compliance prompted internal disciplinary action over deposit mobilisation and marketing-expenditure payments, with the matter referred to RBI. HDFC Bank's board addressed potential divergence from applicable RBI Directions concerning deposits mobilised from the Maharashtra State Road Development Corporation and related marketing-expenditure payments. Based on recommendations of a Special Disciplinary Committee of Independent Directors, it treated the conduct as business overreach rather than mala fide conduct, personal enrichment, or improper motive. Monetary penalties and warning letters were issued to relevant employees, and the board directed communication of the matter to the Reserve Bank of India.