In a swift move to restore regulatory trust following a leadership crisis, HDFC Bank has terminated the services of three senior executives. The action, confirmed on March 20–21, 2026, stems from a long-running internal investigation into the mis-selling of Credit Suisse Additional Tier-1 (AT-1) bonds through the bank’s international branches.
The “Sacked” Leadership
The terminations follow a probe that began in early 2025 after Non-Resident Indian (NRI) clients alleged they were deceived into buying high-risk instruments under the guise of “safe, fixed-return” products.
| Executive | Role | Allegation/Reason |
| Sampath Kumar | Group Head, Branch Banking | Sacked for supervisory lapses as the incident occurred under his oversight. |
| Harsh Gupta | EVP, Middle East, Africa & NRI Onshore | Directly involved in pitching and selling the high-risk bonds to clients. |
| Payal Mandhyan | Senior Vice President | Directly involved in client onboarding and sales process failures. |
The “Bait-and-Switch” Allegations
According to investor complaints filed with the Economic Offences Wing (EOW), bank officials allegedly used aggressive tactics to offload the Swiss bonds:
- Misrepresentation: High-risk, perpetual AT-1 bonds were marketed as “safe-haven” alternatives to Fixed Deposits with assured returns of 10–13%.
- Fund Diversion: NRI clients were reportedly persuaded to shift their Foreign Currency Non-Resident (FCNR) deposits from India to the bank’s Bahrain branch to facilitate the purchase.
- Income Inflation: Staff were accused of artificially inflating the annual income details of clients to make them qualify as “High Net-Worth Individuals” (HNIs) for these complex products.
- The Zero-Out: These bonds were written down to zero during the UBS-led bailout of Credit Suisse in March 2023, leaving investors with losses estimated between $100 million and $120 million.
A Week of “Ethics” Turmoil
The firing of these executives is inextricably linked to the shock resignation of HDFC Bank’s part-time Chairman, Atanu Chakraborty, on March 17, 2026.
“Certain happenings and practices within the bank… are not in congruence with my personal values and ethics,” Chakraborty wrote in his resignation letter.
While the bank initially sought to play down the exit, the subsequent firing of senior staff suggests a deeper “clean-up” operation is underway. Keki Mistry has since been appointed as the interim Chairman to stabilize the institution.
Regulatory Fallout
The scandal has already cost HDFC Bank its growth momentum in the UAE:
- DFSA Ban: The Dubai Financial Services Authority (DFSA) barred HDFC Bank’s Dubai International Financial Centre (DIFC) branch from onboarding new clients in September 2025 due to these sales failures.
- Market Cap Wipeout: HDFC Bank shares crashed by nearly 7% over two days (March 19–20), wiping out approximately ₹96,000 crore in investor wealth.
- Legal Scrutiny: The bank is currently facing multiple lawsuits from aggrieved investors in Nagpur, Chandigarh, and Gurugram, as well as international arbitration threats.
