4 days ago
UAE: India's HDFC Bank officials summoned after alleged sale of risky bonds to some clients
Less than two weeks after Khaleej Times uncovered how India's HDFC Bank allegedly sold high-risk Credit Suisse bonds to ineligible overseas investors, including some in the UAE, Indian authorities have summoned the bank's top executives, including its managing director, for questioning.
A notice dated July 11, seen by Khaleej Times, shows that the Economic Offences Wing (EOW) of Nagpur Police in Maharashtra has filed a complaint against four senior officials of the bank.
The complaint was lodged by an investor who was prominently featured in Khaleej Times' June 27 report.
The individuals named in the notice have been ordered to appear before the Economic Offences Branch in Nagpur at 11am on Saturday, July 12, for further inquiry.
The complaint comes amid growing regulatory scrutiny of HDFC Bank in the UAE, where reports from multiple investors who claim they were misled into buying risky Additional Tier-1 (AT1) bonds through the bank's Dubai-based relationship managers have been filed with the Dubai Financial Services Authority (DFSA).
The DFSA, when contacted, declined to confirm or deny any investigation, citing confidentiality provisions under Article 38 of the Regulatory Law.
'The EOW notice shows that the matter is being taken seriously,' said a Dubai-based investor who has also filed a police complaint against the bank in India. 'We're seeing action in more than one country now.'
The bonds were wiped out when Credit Suisse collapsed in March 2023. Under DFSA rules, they can only be sold to 'professional clients' — those with a net worth above $1 million or proven experience in complex financial products.
However, documents and testimonies reviewed by Khaleej Times suggest that some investors were classified as professional clients, often through inflated or manipulated Know Your Customer (KYC) forms.
When approached earlier, HDFC Bank denied any wrongdoing, stating it has 'robust processes' to communicate product features and risks, and that it takes a serious view of any malpractice. The bank also dismissed as 'speculative' reports that its chairman had met DIFC regulators following a show-cause notice.
