Days after the resignation of HDFC Bank chairman Atanu Chakraborty citing ethical concerns, the bank has terminated the services of three employees for gaps in client onboarding at its Dubai International Financial Centre (DIFC) branch.

According to sources, HDFC Bank has fired three senior executives over the alleged mis-selling of Credit Suisse’s additional tier-1 (AT-1) bonds.

Following the allegations of mis-selling, the local regulator — Dubai Financial Services Authority — barred HDFC Bank from onboarding new customers at its DIFC branch last September.

When approached for a comment, the bank said in a statement that it has identified certain gaps in client-onboarding requirements at its DIFC branch in the United Arab Emirates (UAE) and completed a detailed and objective review of the matter.

“Appropriate remedial actions have been taken in line with internal policies. Personnel changes have been undertaken along with appropriate action as per the bank’s conduct regulation,” it said.

The HDFC Bank has well-established governance frameworks and continues to remain committed to maintaining high standards of compliance and regulatory adherence, it added.

Mr. Chakraborty abruptly resigned as the chairman of the country’s second-biggest lender, citing ethical concerns, effective March 18.

This is the first time that a part-time chairman of HDFC Bank left mid-way, raising concerns over the bank’s functioning.

“Certain happenings and practices within the bank, that I have observed over last two years, are not in congruence with my personal values and ethics. This is the basis of my aforementioned decision,” Mr. Chakraborty said in his resignation letter dated March 17.

In the letter addressed to the chairman of the Goverance, Nomination, Remuneration Committee, H.K. Bhanwala, Mr. Chakraborty said, “there are no other material reasons for my resignation other than those stated above”.

Mr. Chakraborty was appointed as the part-time chairman of the bank effective May 5, 2021, almost a year after he retired as the economic affairs secretary.

His term was extended for another three years in 2024, till May 4, 2027.

Mr. Chakraborty, a 1985-batch IAS officer of the Gujarat cadre, retired as the secretary of the Department of Economic Affairs in April 2020. Prior to that, he was the secretary of the Department of Investment and Public Asset Management (DIPAM). Both departments are under the Finance Ministry.

Mr. Chakraborty became the chairman during the reverse merger process of the bank with the parent entity, HDFC Limited, a leading mortgage firm in the country.

The merger of HDFC Limited with HDFC Bank became effective on July 1, 2023, creating a financial behemoth with a combined balance sheet of more than ₹18 lakh crore.

HDFC Bank has been barred from onboarding new customers at its Dubai International Financial Centre branch by the local regulator.

HDFC Bank, India’s largest private sector lender, said it has initiated the necessary steps to comply with the notice of the Dubai Financial Services Authority and added that it does not see any material impact from it.

Exact details of the alleged violations leading to the action against HDFC Bank were not immediately clear.

In an exchange filing late on Friday evening, HDFC Bank said it has received the “decision notice” from DFSA, which points to alleged violations pertaining to financial services offered by the DIFC branch to customers not onboarded at the outlet, and also in the onboarding of customers at the Dubai International Financial Centre (DIFC) Branch.

HDFC Bank disclosed that it has also been barred from soliciting customers, but added that it can continue to service existing customers.

The DIFC branch has 1,489 customers, including joint accounts, HDFC Bank said.

The regulatory decision will be in force till the bank gets a communication from the watchdog, amending or revoking its decision in writing, HDFC Bank said.

“The bank has already initiated necessary steps to comply with the directives in the notice and is committed to working with the DFSA to promptly remediate and address DFSA concerns at the earliest,” the HDFC Bank filing said.

The HDFC Bank scrip had closed 0.47% down ₹945.15 apiece on the BSE on Friday (September 26, 2025) against a 0.90% correction on the benchmark.