HDFC Bank Sacks 3 Senior Executives Over Mis-Selling Of Credit Suisse AT1 Bonds
The developments come two days after the bank's part-time chairman Atanu Chakraborty resigned abruptly over differences in “values and ethics”: Reports
MUMBAI: India’s largest private lender HDFC Bank has reportedly terminated its group head of retail branch banking Sampath Kumar, along with two other senior officials for their alleged involvement in mis-selling of Credit Suisse’s Additional Tier 1 bonds according to a news report.
Alongside Kumar, the bank has dismissed Harsh Gupta, executive vice-president handling Middle East, Africa and NRI onshore business and Payal Mandhyan, senior vice-president. Both had been suspended in January 2025 after an internal probe was initiated into activities at the bank’s Dubai branch. The report said that while Kumar may not have directly engaged in mis-selling, the lapses occurred under his supervision. However, Gupta and Mandhyan were allegedly directly involved in mis-selling the instruments.
The developments come two days after the bank's part-time chairman Atanu Chakraborty resigned abruptly over differences in “values and ethics”.
According to the report, the lender is investigating allegations that its Dubai branch mis-sold high-risk AT-1 bonds. A complaint alleged that the bank marketed these high-yield instruments as "safe-haven" investments to unsuspecting retail customers. The customers were deceived into transferring their foreign-currency non-resident (FCNR) deposits from India to Bahrain. These bonds were written off after Credit Suisse went bankrupt and was taken over by another banking giant, UBS.
The Dubai Financial Services Authority (DFSA) banned HDFC Bank from onboarding new customers due to failures in the sales process of these complex, and high-risk securities.
