The decline follows reports that the bank has terminated three senior employees after an internal investigation into alleged mis-selling of AT1 bonds to NRI clients.

According to media reports, the action follows a detailed review of transactions conducted via the bank’s overseas operations. The transactions were primarily linked to its Dubai branch.

The issue relates to the sale of Credit Suisse AT1 bonds. These bonds were written off after Credit Suisse went bankrupt and was taken over by another banking giant, UBS.

Reports suggest some NRI clients were encouraged to move FCNR deposits to overseas accounts. These funds were then used to invest in high-risk AT1 bonds.

The development comes amid regulatory scrutiny and investor concerns. It also adds to pressure following the recent resignation of part-time chairman Atanu Chakraborty.

Chakraborty stepped down on 18 March 2026 citing certain developments not aligned with his personal values and ethics. The Reserve Bank of India subsequently approved Keki Mistry as interim chairman for three months starting 19 March 2026.

The RBI has also stated that the bank remains well-capitalised with no material concerns on governance or financial stability.

Meanwhile, in its analyst call, the bank’s management and board members reiterated that there are no material governance or operational issues, with internal controls, risk management and oversight mechanisms remaining robust.

Brokerage sentiment has turned cautious. A domestic brokerage has cut its target price to Rs 1,090 from Rs 1,200, citing governance-related overhang.

HDFC Bank is India's largest private sector lender. As of 31st December 2025, the bank's distribution network was at 9,616 branches and 21,176 ATMs across 4,170 cities/ towns as against 9,143 branches and 21,049 ATMs across 4,101 cities/ towns as of 31 December 2024.

The bank reported a 11.46% jump in standalone net profit to Rs 18,563.75 crore on 2.91% increase in total income to Rs 90,005 crore in Q3 FY26 over Q3 FY25.