An internal vigilance report at India's largest private bank, concluded that money paid to a Maharashtra state agency as "road safety" sponsorship was really interest the bank was not allowed to pay. HDFC Bank rejects any wrongdoing. The timing is what makes the story hard to put down. When Atanu Chakraborty resigned as chairman of HDFC Bank in March 2026, he gave a reason that was at once personal and vague. Certain "happenings and practices within the bank," he said, were "not in congruence with my personal values and ethics." He did not spell out which ones. Within days, the bank's new interim chairman and the Reserve Bank of India both stepped forward to say there was nothing wrong with HDFC Bank's governance. Two months later, a fuller picture arrived. Aninvestigation by The Indian Express, published on 27 May 2026, reported that the bank's own auditors had concluded it paid the Maharashtra State Road Development Corporation (MSRDC), a state government agency, around Rs 45 crore in interest it was not allowed to pay, and buried it inside its marketing budget as sponsorship of a road safety campaign. One detail captures how thin the cover was. A single photograph, the auditors found, was attached to three separate invoices worth about Rs 9 crore, presented as proof of a campaign they could find almost no other sign had taken place. And the trail did not stop at a junior employee. The bank's internal vigilance report, the Express reported, pointed to the chief executive, the chief financial officer and the chief marketing officer, among more than ten senior names. "Differential interest" just means interest above the rate everyone else gets. RBI rules do not let a bank quietly hand one depositor a better savings rate than other customers. Per the Express, the gap here was 2.51 percentage points: regular savers got 3.5%, while MSRDC had been promised 6.01%. The bank's Asset Liability Committee briefly approved a 4.5% rate for very large deposits, betting MSRDC would bring in over Rs 10,000 crore. Only around Rs 200 crore showed up at first, and that window was shut in April 2022. So the promised gap still had to be paid somehow. The solution, the vigilance report says, was to route it through the marketing department as sponsorship of an MSRDC "road safety awareness campaign." The internal audit's own description of the cover story is the damning part. The payments skipped the team that normally runs such campaigns. Auditors could not find any document explaining how the contribution amounts were arrived at. In one detail the Express highlights,a single photograph was attached across three invoicesworth roughly Rs 9 crore, and payments went out without the event-confirmation certificates the bank's own rules required. The marketing team's reply to auditors was unusually frank: the deal "was done by the business team (Retail Branch Banking) with MSRDC," it said, and "came to marketing for processing the payment," with extra budget handed over by
