HDFC Bank faces a US class action over an alleged Rs 45 crore scheme disguising interest payouts to MSRDC as marketing costs.

The lawsuit was filed on August 13 in the US District Court for the Southern District of New York by investor Jwalant Natvarlal Soneji.

Summonses went out the next day. HDFC Bank, CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan are all named as defendants.

Here’s what the case is actually about. Between 2023 and 2025, HDFC Bank allegedly routed close to Rs 45 crore, roughly $4.7 million, to the Maharashtra State Road Development Corporation.

The bank reportedly booked these payments as marketing expenses linked to a road safety campaign. The lawsuit tells a different story.

It claims the payments were really extra interest, pushing MSRDC’s returns up to 6.01% against the standard 3.5% savings rate most depositors get.

That gap works out to 2.51 percentage points, and the complaint argues investors were never properly told about it.

The proposed class covers anyone who bought HDFC Bank’s American Depositary Shares between July 17, 2023 and May 26, 2026.

The plaintiffs are relying on Sections 10(b) and 20(a) of the US Securities Exchange Act, arguing the bank’s disclosures about its own internal controls were misleading.

This isn’t coming out of nowhere. HDFC Bank had already reviewed the MSRDC matter internally.

In July, its board described the conduct as “business overreach” and imposed a Rs 1 lakh penalty along with warning letters on three senior executives, including Jagdishan, Vaidyanathan and retail assets head Arvind Vohra. The bank isn’t backing down.

It has called the lawsuit without merit and noted that shareholder suits like this are fairly common in the US after a stock takes a hit. HDFC Bank says it plans to defend itself vigorously.

For now, none of the allegations have been proven in court. The case moves forward through the US legal process from here.

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