HDFC Bank Dubai branch barred from onboarding new Customers, But Why? Know Whole Story

The Dubai Financial Services Authority (DFSA) has stopped HDFC Bank’s Dubai branch from adding new customers, according to media reports. The bank said that its Dubai International Financial Centre (DIFC) branch has received a formal notice from the DFSA.

The notice, dated September 25, 2025, says that the DIFC branch cannot do business with new customers. It also cannot complete the onboarding of customers who had not finished the process when the directive was issued.

The DFSA has also restricted the branch from giving advice on financial products, offering custody-related services, arranging or advising on credit, and arranging investment deals, reported The Financial Express.

The Dubai branch has further been told not to carry out financial promotions. However, existing customers can continue to use the services. Clients who had already taken financial services earlier, but were not formally onboarded, may also be allowed to continue.

The bank said that the DFSA’s decision will not affect the branch’s financial performance, as this business is not significant for its overall operations. As of September 23, 2025, the DIFC branch had 1,489 customers, including joint account holders, reported The Economic Times.

In a statement, the bank said, “We have already started taking steps to comply with the DFSA notice. We are committed to working with the DFSA in its investigation and will address their concerns quickly.”

It also said, “The business at the DIFC Branch is not significant to the Bank’s overall operations or financial position, so no major impact is expected.”

This action comes during an ongoing two-year-old controversy over the alleged mis-selling of high-risk Credit Suisse additional tier-1 (AT1) bonds by the bank. Investors have claimed that the bank promoted these products through its UAE operations.

Why Ban has been imposed on HDFC Bank Dubai? What HDFC Bank said?

Matter	Information
Name of the listed entity	HDFC Bank Limited (“the Bank”)
Name of the authority	Dubai Financial Services Authority (“DFSA”)
Type of communication received	Decision Notice
Nature and details of the action(s) taken, initiated or order(s) passed OR Brief summary of the material contents of the communication received, including reasons for receipt of the communication	DIFC Branch of the Bank has been prohibited from: soliciting or conducting any business with new clients (i.e. any client who has not completed DIFC Branch’s onboarding process as at September 25, 2025) that constitutes or may constitute the carrying on of ‘financial services’ of (a) Advising on Financial Products, (b) Arranging Deals in Investments, (c) Arranging Credit, and (d) Advising on Credit and Arranging Custody; and soliciting, onboarding or engaging in any Financial Promotions with any new client. The prohibition does not apply to (a) the continued servicing of existing customers of the DIFC Branch and (b) the onboarding of and servicing of customers who may have been previously offered or provided financial services and who had not, at such time, been onboarded as clients of the DIFC Branch. The prohibition under the decision notice will remain in place until otherwise amended or revoked in writingby DFSA.

Date of receipt of direction or order, including any ad-interim or interim orders, or any other communication from the authority	The notice dated September 25, 2025 was received via email on September 26, 2025.
Period for which communication would be applicable, if stated	On and from September 26, 2025 until otherwise amended or revoked in writing by the DFSA.
Details of the violation(s)/contravention(s) committed or alleged to be committed ORDetails of any aberrations/non-compliances identified by the authority in the communication	The DIFC Branch carrying on financial services by arranging/ advising on financial products/ credit for customers who were not onboarded by the DIFC Branch, issues with onboarding of customers at the DIFC Branch, and other matters related thereto.
Impact on financial, operation or other activities of the listed entity, quantifiable in monetary terms to the extent possible OR Expected financial implications on the listed company, if any	The business undertaken at the DIFC Branch is not material to the Bank’s operations or its financial position and accordingly no material impact/ implications are expected with respect to the overall operations or financial position of the Bank. As on September 23, 2025, the DIFC Branch has 1,489 customers onboarded, including joint holders. As mentioned above, the prohibition does not apply to(a) the continued servicing of existing customers of the DIFC Branch and (b) the onboarding of customers who may have been offered or provided financial services and who had not, during such offer or provision, been onboarded as clients of the DIFC Branch and their ongoing servicing.
Details of any penalty or restriction or sanction imposed pursuant to the communication	Please refer to the above.
Action(s) taken by listed company with respect to the communication	The Bank has already initiated necessary steps to comply with the directives in the above-referred notice and is committed to work with the DFSA to promptly remediate and address the DFSA concerns at the earliest.
Any other relevant information	None