HDFC Bank shares fall over 2% amid ‘camouflaged’ payments probe
On Wednesday, shares of HDFC Bank had fallen as much as 2.8% intraday to Rs 756.9 on the National Stock Exchange.
Shares of HDFC Bank closed 2.6% lower on Wednesday compared to Tuesday after The Indian Express reported the private sector lender had conducted an internal vigilance investigation into interest payments of Rs 45 crore, camouflaged as marketing expenditure, made to the Maharashtra State Road Development Corporation (MSRDC) for 2023-24 and 2024-25.
The internal investigation was ordered on March 12 by the Audit Committee of the Board, just six days before Atanu Chakraborty abruptly resigned as the bank’s part-time Chairman, saying “certain happenings and practices within the bank are not in congruence with my personal values and ethics”.
On Wednesday, shares of HDFC Bank had fallen as much as 2.8% intraday to Rs 756.9 on the National Stock Exchange. The worst-hit banking stock, HDFC Bank’s slide pulled down the Nifty Bank index by 0.4%. The overall Nifty 50 ended 0.03% down at 23,907.15.
At 10.73%, HDFC Bank is the company with the highest weight in the Nifty.
While HDFC Bank and the Reserve Bank of India did not respond to detailed questionnaires sent by The Indian Express at the time of the publication of its story, a spokesperson for the private bank told news agency Reuters that it has robust internal oversight, audit and control processes and systems and all issues are dealt with in accordance with established norms and full process is always followed before final determination post any internal review. “We strongly reject any assumptions of wrongdoing or culpability based on selective material,” the spokesperson added.
The bank is yet to issue an official statement on the issue to the exchanges.
Chakraborty’s resignation on March 18 had sparked speculation around the internal practices around the bank and triggered a panic in the market. In the days after the resignation, the bank’s stock had nosedived around 8%. Since close of business on Mar 18, HDFC Bank’s shares are down 9.9%.
While HDFC Bank ended sharply in the red on Wednesday, Hindalco was the second-biggest gainer, ending 4.2% higher after the price of aluminium rose to the highest in more than four years. Metal stocks, on the whole, rose on Wednesday, with Nifty Metal ending up 1.7%.
Others to post losses include Nifty IT, which closed 0.3% lower. The AI super rally that has taken hold across the world continues to ignore India due to its low exposure to the new technology. Earlier this week, the Taiwanese stock market overtook India as the world’s fifth-largest on the back of chipmaker Taiwan Semiconductor Manufacturing Co’s eye-watering rise.
Shares of HDFC Bank closed 2.6% lower on Wednesday compared to Tuesday after The Indian Express reported the private sector lender had conducted an internal vigilance investigation into interest payments of Rs 45 crore, camouflaged as marketing expenditure, made to the Maharashtra State Road Development Corporation (MSRDC) for 2023-24 and 2024-25.
The internal investigation was ordered on March 12 by the Audit Committee of the Board, just six days before Atanu Chakraborty abruptly resigned as the bank’s part-time Chairman, saying “certain happenings and practices within the bank are not in congruence with my personal values and ethics”.
On Wednesday, shares of HDFC Bank had fallen as much as 2.8% intraday to Rs 756.9 on the National Stock Exchange. The worst-hit banking stock, HDFC Bank’s slide pulled down the Nifty Bank index by 0.4%. The overall Nifty 50 ended 0.03% down at 23,907.15.
At 10.73%, HDFC Bank is the company with the highest weight in the Nifty.
While HDFC Bank and the Reserve Bank of India did not respond to detailed questionnaires sent by The Indian Express at the time of the publication of its story, a spokesperson for the private bank told news agency Reuters that it has robust internal oversight, audit and control processes and systems and all issues are dealt with in accordance with established norms and full process is always followed before final determination post any internal review. “We strongly reject any assumptions of wrongdoing or culpability based on selective material,” the spokesperson added.
The bank is yet to issue an official statement on the issue to the exchanges.
Chakraborty’s resignation on March 18 had sparked speculation around the internal practices around the bank and triggered a panic in the market. In the days after the resignation, the bank’s stock had nosedived around 8%. Since close of business on Mar 18, HDFC Bank’s shares are down 9.9%.
While HDFC Bank ended sharply in the red on Wednesday, Hindalco was the second-biggest gainer, ending 4.2% higher after the price of aluminium rose to the highest in more than four years. Metal stocks, on the whole, rose on Wednesday, with Nifty Metal ending up 1.7%.
Others to post losses include Nifty IT, which closed 0.3% lower. The AI super rally that has taken hold across the world continues to ignore India due to its low exposure to the new technology. Earlier this week, the Taiwanese stock market overtook India as the world’s fifth-largest on the back of chipmaker Taiwan Semiconductor Manufacturing Co’s eye-watering rise.
