'Extra payout' to Maharashtra PSU: HDFC board slaps Rs 1 lakh fines on MD, CFO
HDFC Bank's board has imposed fines on its top executives, including the CEO and CFO, following an internal review of deposit arrangements with a state-run corporation. The bank stated that while there was business overreach, there was no evidence of personal gain or malicious intent.
Why it matters
The rare public disciplinary action against top banking executives highlights increasing pressure on corporate boards to maintain strict regulatory oversight.
MUMBAI: HDFC Bank's board on Monday imposed a penalty of Rs 1 lakh each on managing director & CEO Sashidhar Jagdishan, chief financial officer Srinivasan Vaidyanathan and group head of retail assets Arvind Vohra, and also issued warning letters following an internal review of the bank's deposit arrangements with Maharashtra State Road Development Corporation in 2017 and 2021.The review found instances of "business overreach" but no evidence of mala fide intent or personal gain. The action was based on the recommendations of a special disciplinary committee of independent directors, with other employees involved also receiving warning letters.Bankers said while the penalty was nominal, a public, board-backed cash penalty on a sitting MD & CEO, framed as internal discipline rather than a regulator's order, appeared to be unprecedented. The penalty comes at a time when RBI has been pushing boards to exercise real oversight.
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