HDFC Bank Ltd., India’s largest private sector lender, has put two senior executives on garden leave amid an investigation after customers alleged they had mis-sold Credit Suisse securities, people familiar with the matter said.
The bank made the move in recent months with the employees at the center of the allegedly disputed trading of Credit Suisse’s additional Tier-1 bonds, the people said, asking not to be identified discussing confidential matters.
In response to queries from Bloomberg, an HDFC spokesperson said: “With regard to the sale of Credit Suisse AT1 bonds, the bank has not encountered any instance of misselling so far.”
The spokesperson did not respond to questions from Bloomberg about the placement of the bankers on leave. “HDFC Bank takes all matters relating to its reputation with utmost seriousness and is committed to addressing all stakeholders’ concerns,” the spokesperson said.
Some HDFC customers have claimed they were not properly informed about the risky nature of the bonds, even though the lender insisted it complied with all applicable laws, Bloomberg News reported last year. The bonds were written down after Credit Suisse’s emergency merger with UBS Group AG in 2023, causing billions in losses to thousands of investors around the world and leaving global banks in trouble.
An internal investigation is underway and the bank’s report will likely be released soon, the people said, adding that the bank has not yet reached a conclusion on wrongdoing.
HDFC Bank was among the global lenders hit by the historic fallout. The HDFC investigation is expected to determine who within the bank authorized the sale of the bonds, the people said. Once responsibility is established, the bank is expected to take punitive action, she added.
The bank disclosed in a filing last month that a Dubai regulator identified deficiencies in the lender’s process for offering financial services to local customers who were not on board at the Dubai International Financial Centre, resulting in a ban on adding new customers to the Dubai branch.
While the filing did not link the action to the AT1s, people familiar with the regulator’s investigation said it fueled the bank’s decision to place the bankers on leave. A spokesman for the Dubai Financial Services Authority declined to comment.
AT1 instruments are a class of hybrid securities developed after the global financial crisis to shift the burden of bank bailouts onto bondholders and away from taxpayers. They are at the lowest leverage levels, meaning yields are attractive, but they are low in the repayment rankings.
In India, banks are prohibited from selling AT1 bonds to retail investors, although exceptions are made for “professional investors” who are considered financially sophisticated with more than $1 million in investable assets.
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Published on October 28, 2025
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