A big allegation has been made against HDFC Bank by The Indian Express. In an investigation, the Indian Express found several loopholes in the governance and practices of HDFC Bank.
Recently, Atanu Chakraborty – former chairman of HDFC Bank, had resigned from Bank citing governance issues. The resignation of Atanu Chakraborty has created a chaos in the banking industry and has raised several questions over HDFC Bank. He said that some developments and practices in the bank over the last two years did not match his personal values and ethics. This statement took internet by storm and public started demanding answer from HDFC Bank.
According to the report, HDFC Bank’s internal vigilance probe found that payments worth about Rs 45 crore were made to Maharashtra State Road Development Corporation (MSRDC) during FY24 and FY25 as “differential interest”.
Differential interest means the extra interest amount paid above the normal or agreed rate. For example, if a bank should pay 6% interest but pays more than that, the extra amount is called differential interest.
However, these payments were routed through the bank’s marketing department and shown as sponsorship spending for a road safety awareness campaign.
The bank’s Audit Committee of the Board ordered a formal internal vigilance investigation on March 12 after an internal audit of the marketing department flagged the payments and rated the department’s performance as “unsatisfactory”.
The report said the payments were meant to compensate MSRDC for interest above the specified rate on its deposits. Instead of being credited directly as interest, the money was allegedly routed through the marketing department as campaign contributions through four local vendors.
For the advertising and marketing industry, the issue is not just a banking governance matter. It also raises questions about how large sponsorship and marketing budgets are approved, documented, executed, and audited, especially in regulated sectors such as banking and financial services.
HDFC Bank Chief Marketing Officer Ravi Santhanam reportedly acknowledged during the vigilance probe that the marketing department acted as a “facilitator to camouflage differential interest reimbursement as marketing spend”.
The report also mentioned his statement that “a small portion” of the money was spent on actual marketing activities to support vendor invoices and make the payments appear as legitimate marketing expenses.
The report further said that the internal audit found the marketing department paid Rs 39.7 crore between FY24 and FY25 towards MSRDC’s “Road Safety Awareness Campaign”. According to the report, the audit could not independently verify the accuracy, basis, or rationale of the contribution because no documents were available to show how the amount was calculated.
It also said that vendor invoices submitted as proof of marketing activity were not properly validated. A single photograph was reportedly attached to three invoices worth around Rs 9 crore. The report added that payments were processed without event confirmation certificates, even though such certificates were required under the bank’s rules.
This is where the story becomes important for marketers, agencies, and corporate communication teams. Sponsorships, awareness campaigns, and branded public-interest initiatives often involve marketing, CSR, compliance, finance, and business teams together. When such spending is large, the approval process, proof of execution, and vendor documentation become as important as the campaign itself.
HDFC Bank’s marketing department told the internal audit that the sponsorship was part of a business arrangement with MSRDC handled by the Retail Branch Banking team. It also said that the finance department provided an additional budget over and above the regular marketing budget.
The report also said that the vigilance probe flagged alleged violations of RBI master directions on interest rates on deposits, which prohibit banks from offering negotiated returns to individual depositors. It also reported a possible breach of the bank’s anti-bribery and anti-corruption policy.
Does this mean that HDFC Bank officials bribed the Government officers for funds? More details will be released soon.
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