HDFC Bank probe finds executives leaked confidential information: Report

NEW DELHI: HDFC Bank has found evidence that two senior executives shared confidential business plans and possibly market-sensitive information with outsiders, according to a Bloomberg report.

The probe began after some bank leaders raised concerns about possible leaks. The two executives, who oversee key businesses and functions, were identified during the investigation. The bank is still checking whether the information was misused.

The findings were shared with senior management, including some board members, earlier this year. Both executives have been formally informed of the findings, but it is not yet clear what action the bank will take. The sources spoke on condition of anonymity as the matter is confidential.

An HDFC Bank spokesperson confirmed that an internal review was underway but declined to comment on the findings or the executives involved. “In line with our policies, an internal review into this matter is currently underway to gather and evaluate all relevant facts,” the spokesperson said via email to Bloomberg. “Appropriate action will be taken based on the findings, once the review is complete.”

The bank said it was committed to high standards of ethics and governance and took reports of possible violations seriously.

The investigation comes as HDFC Bank prepares for a change at the top following a period marked by boardroom disputes and senior management departures.

The lender, valued at about $115 billion, is India's largest bank by market value and has spent three decades building a reputation for conservative management, strong internal controls and consistent profitability, Bloomberg reported. Its share price has declined about 28% this year.

Anup Bagchi, a veteran of rival ICICI Group, is scheduled to become the bank's chief executive later this month, on October 27. His appointment will make him the first outsider to take up the position.

The transition follows the unexpected decision by incumbent chief executive Sashidhar Jagdishan not to seek another term. Jagdishan is stepping down after six years leading the bank. Kaizad Bharucha, deputy managing director and one of HDFC Bank's longest-serving executives, has also asked to leave at the end of December.

The findings of the internal probe add to the challenges facing the lender as it prepares for the leadership change. The latest developments follow a series of internal disagreements that have surfaced publicly in recent months.

In March, then-chairman Atanu Chakraborty resigned abruptly, citing differences between his personal values and certain practices at the bank. HDFC Bank subsequently commissioned an independent legal review, which said Chakraborty's concerns were not substantiated.