The complaint, filed by Levi & Korsinsky, LLP, argues that HDFC Bank’s SEC filings for fiscal years 2024 and 2025 provided only generic warnings about regulatory risks while failing to disclose specific, ongoing practices. Plaintiffs allege that the bank routed Rs 4.7 million through its marketing budget to provide interest markups for a state entity, a move purportedly in violation of Reserve Bank of India directives. The lawsuit contends this practice artificially inflated the bank's reported net interest income and margins.

Market reaction to the disclosures was swift. HDFC American Depositary Shares dropped 7.28% on March 18, 2026, following the resignation of independent director Atanu Chakraborty, who cited ethical concerns. A further 4.1% decline occurred on May 27, 2026, after reports surfaced regarding the internal investigation into the matter. Investors have until October 13, 2026, to apply for appointment as lead plaintiff in the case, which is currently pending in the United States District Court for the Southern District of New York.