Will HDFC Bank make a full and true disclosure?

Mumbai: Why is HDFC Bank not making a full and true disclosure and coming out clean in this whole matter?

In DIFC AT1 Bond mis-sell issue which was reported as regulatory breach by HDFC Bank to DFSA, CBUAE and Bahrain regulator nearly two years back and under their radar since then, bank’s Board Committee has taken extreme action against more than two dozen employees on March 18 and not 3 as publicised by the bank.

The bank had said recently that it has taken remedial steps, including personnel changes, after identifying gaps in client onboarding at its DIFC branch, as it faces regulatory scrutiny over its overseas operations.

These actions also include termination of HDFC Bank Dubai Representative CEO Rajiv Warrior and exemplary penalty of financial censure against Group Head Asheesh Parthasarthy.

For a serious regulatory breach done deliberately by these senior employees for more than 10 years which has resulted in first a regulatory embargo and such major action against huge number of employees which will be followed up with huge penalty shortly expected from Dubai regulator, why is the bank CEO, Sashidhar Jagdishan projecting it as ‘technical gap in documentation and regulatory interpretation’ in all his media interviews.

Is it his ‘innocent knowledge gap’ or a mischievous design to weaken the disciplinary cases against these employees by making such public statements to helpSampath and Ashish during their appeal.

Immediately after approving these actions, Atanu Chakraborty resigned. Was Chakraborty hinting this in his resignation letter?

Of late, the bank has appointed external law firms to review Atanu Chakraborty's resignation letter.

Is the legal review now instituted by the Board through the external law firms and under supervision of shortly retiring, Sudhir Kumar Jha, who is the group head of the legal function and group general counsel at the bank since July, 2023, a cover-up exercise?

Now the onus is on the Board, Audit Committee, interim chairman Keki Mistry, MD Ranganath, Lily Vadera to answer and come out clean to restore faith of investor and customer.

Talking to Bizz Buzz, MV Hariharan, former treasury head of State Bank of India, says, “Good observations. That said, it’s actually about the abject failures of the checks and balances..focusing instead as it appears, on cheques fattening the accounts of those tasked with protecting clients' assets judiciously.”

The CRO of any entity is a very important and critical cog in ensuring this.