Share price tumbles after HDFC Bank chairman resigns amid fraud allegations

The resignation of HDFC Bank chairman Atanu Chakravarthy on March 18 sent shockwaves through the market. In his brief note, Chakravarthy cited “certain events and practices” that conflicted with his personal ethics, a reference believed to be linked to the MSRDC interest‑rate controversy.

Investors reacted swiftly, with the bank’s U.S.‑listed shares dropping 7.28% to close at $26.62 on the day of the filing. The share price continued to erode after a May 27 investigation by The Indian Express revealed that more than ten senior officials, including CEO Jagdishan, had verbally approved the concealed payments.

The downward pressure culminated in a further 4.1% decline, bringing the closing price to $23.78. In India, the stock closed with a modest 1.75% weakness at ₹714.45. Analysts warn that the combined effect of regulatory scrutiny, potential RBI penalties and class‑action exposure could keep the stock volatile until the case is resolved.

HDFC Bank maintains that the lawsuit is “without merit” and that it will fully defend its actions, while the plaintiffs argue that the bank’s leadership acted recklessly, causing investors to suffer losses on artificially high share prices.