Shares of HDFC Bank dropped sharply on Monday, 23 March, 2026, falling nearly 3 per cent to Rs 757.05 and extending losses for a fourth straight session. The stock has declined over 10 per cent in just four days, as concerns around internal misconduct and governance weigh on investor sentiment.
The trigger for the decline appears to be an internal investigation that led to the termination of three senior employees. The action followed findings of alleged mis-selling of high-risk financial products to non-resident Indian (NRI) clients. The issue is linked to transactions carried out through the bank’s overseas operations, particularly its Dubai branch.
At the centre of the controversy are Additional Tier-1 (AT1) bonds issued by Credit Suisse. These instruments were written off after the bank’s collapse and subsequent takeover by UBS. Reports indicate that some clients were encouraged to shift funds from safer FCNR deposits into overseas accounts, which were then used to invest in these high-risk bonds.
The fallout has raised concerns about sales practices and oversight. Investors are reacting not just to the financial impact but also to the reputational risk stemming from employee conduct. The swift termination of those involved suggests the bank is taking corrective action, but the episode has already dented confidence.
The situation is further complicated by recent leadership changes. Former chairman Atanu Chakraborty stepped down earlier this month, after which Keki Mistry was appointed interim chairman following approval from the Reserve Bank of India.
While the regulator has maintained that the bank remains financially stable, brokerage firms have turned cautious. The episode highlights how lapses in employee conduct, especially in product selling, can directly impact market performance and investor trust.
