HDFC Bank board to review MSRDC deposit matter; closure of issue expected soon

HDFC Bank's board is expected to review reports submitted by the bank's vigilance and audit committees regarding the Maharashtra State Road Development Corporation (MSRDC) deposit-related matter shortly, according to sources.

The review is expected to pave the way for closure of the issue.

Sources said the board will examine the findings of the internal reviews and that there is no indication of any malafide intent in the matter.

The issue came under scrutiny following a media report,

which cited an internal vigilance investigation into payments of around ₹45 crore linked to deposits placed by MSRDC with the private-sector lender.

The report said the payments were allegedly routed through the bank's marketing budget and accounted for as sponsorship or campaign expenses.

The vigilance probe is said to have concluded that the payments effectively compensated MSRDC for an interest-rate differential on deposits.

HDFC Bank has previously defended its handling of the payments, stating that the matter was reviewed through established governance mechanisms and that no individual personally benefited from the transactions.

Industry experts have described the issue as an operational and governance matter rather than a fundamental concern about the bank's business model.

Abizer Diwanji, founder of NeoStrat Advisors LLP, earlier said that operational challenges can arise when actual deposit flows differ from initial commitments, requiring banks to find practical solutions. He noted that the matter appeared to be more operational in nature.

Ashvin Parekh, Managing Partner, Advisory Services, said banks often exercise pricing flexibility when managing large institutional deposits and asset-liability requirements. According to Parekh, such commercial decisions are common across the banking industry and are influenced by the size and strategic importance of deposits.