The litigation alleges that HDFC Bank executives misled shareholders by concealing a scheme to pay inflated interest rates to the Maharashtra State Road Development Corporation. According to the filing, the bank funneled approximately $4.7 million to the state entity, disguising the payments as sponsorship for a road safety campaign to bypass standard interest caps. The complaint asserts that these practices, which allegedly received approval from senior management including CEO Sashidhar Jagdishan, resulted in overstated interest income and distorted operating expenses.

Market volatility followed revelations regarding the bank's internal conduct. On March 18, 2026, shares dropped 7.28% after Atanu Chakraborty, then Chairman and Independent Director, resigned citing practices that conflicted with his personal ethics. A further 4.1% decline occurred on May 27, 2026, following a report in The Indian Express detailing the internal probe into the alleged marketing-spend camouflage. Investors seeking to serve as lead plaintiff in the recovery efforts must submit their applications to the court by October 13, 2026.