In a significant development at HDFC Bank, three senior executives have been dismissed following lapses in client onboarding at its Dubai International Financial Centre (DIFC) branch. The move comes shortly after the unexpected resignation of the bank’s part-time chairman, Atanu Chakraborty, who cited ethical concerns as the reason for stepping down.
Sources indicate that the officials were implicated in the alleged mis-selling of Credit Suisse’s additional tier-1 (AT-1) bonds. In response to the concerns, the Dubai Financial Services Authority (DFSA) had, in September last year, prohibited HDFC Bank from onboarding new clients at its DIFC branch.
In an official statement, HDFC Bank said it had identified specific gaps in client-onboarding procedures at the UAE branch and conducted a thorough, objective review. “Appropriate remedial measures have been implemented in accordance with our internal policies. Personnel changes have been effected, and further action taken as per the bank’s code of conduct,” the statement read. The bank emphasised its robust governance framework and reiterated its commitment to high standards of regulatory compliance.
Chakraborty’s Resignation
Atanu Chakraborty resigned as chairman with immediate effect from 18 March, marking the first instance of a part-time chairman leaving HDFC Bank mid-term. His resignation has raised questions about the internal functioning and ethical practices within the bank.
In his resignation letter, dated 17 March, Chakraborty addressed H K Bhanwala, chairman of the Governance, Nomination and Remuneration Committee, explaining that “certain happenings and practices within the bank observed over the last two years are not in congruence with my personal values and ethics. There are no other material reasons for my resignation.”
Chakraborty, a 1985-batch IAS officer of the Gujarat cadre, had retired as Secretary of the Department of Economic Affairs in April 2020, prior to which he headed the Department of Investment and Public Asset Management (DIPAM). He assumed the role of part-time chairman on 5 May 2021, and his term was extended in 2024 until 4 May 2027.
DIFC Branch Onboarding Review
| Aspect | Details |
|---|---|
| Branch | Dubai International Financial Centre (DIFC) |
| Officials Involved | 3 Senior Executives |
| Allegation | Mis-selling of Credit Suisse AT-1 bonds; gaps in client onboarding |
| Regulatory Action | DFSA restricted new client onboarding in September 2025 |
| Bank Action | Personnel changes, remedial measures, compliance review |
HDFC Bank–HDFC Limited Merger
Chakraborty had overseen the bank during its reverse merger with parent company HDFC Limited, one of India’s leading mortgage providers. The merger, effective 1 July 2023, created a financial behemoth with a combined balance sheet exceeding ₹18 lakh crore, making it one of the largest financial institutions in the country.
The dismissal of executives and the chairman’s resignation together highlight ongoing scrutiny over governance and ethical practices at HDFC Bank, underscoring the challenges large financial institutions face in maintaining compliance while pursuing rapid growth.