HDFC Bank has taken drastic steps to oust three of its senior executives from the company in the alleged mis-selling of Credit Suisse’s Additional Tier-1 (AT1) bonds. According to official sources, the bank has accepted the resignation of Group Head (Branch Network) Sampat Kumar, Executive Vice President (Middle East, Africa and NRI onshore business) Harsh Gupta, and Senior Vice President Payal Mandyan from the company. However, it is not yet clear when he has been asked to leave the company. This has not been officially confirmed.
what is the allegation
According to the news, a complete investigation of bank verification is going on in this matter. It is alleged that high-risk AT1 bonds were listed for “safe investments” through the Dubai branch. This incident has come to light at a time when recently the bank’s part-time chairman Atanu Chakraborty had suddenly given back the shares linked to “values and assets”, due to which questions are being raised on the bank’s shares as well.
HDFC Bank is investigating
HDFC Bank is investigating allegations of alleged mis-selling of high-risk AT-1 bonds at its Dubai branch, Moneycontrol reported. One complaint alleges that the bank promoted these high-yield instruments as “safe-havens” to unknowing retail customers. These bonds were written-off following the bankruptcy of Credit Suisse and its acquisition by UBS, causing huge losses to investors. The Dubai Financial Services Authority (DFSA) has banned HDFC Bank from onboarding new customers due to deficiencies in its complex and high-risk securities sales process.
Names of four HDFC officials were in the complaint
Let us tell you, earlier a high-net-worth individual had filed a complaint in the Economic Offenses Wing (EoW) of Nagpur, in which the names of four HDFC officials were included. Bloomberg reported in October that India’s largest private sector lender had sent two of its executives on “gardening leave” in connection with the investigation.