The lawsuit centers on allegations that HDFC Bank misstated its financial health by disguising deposit inducement payments as marketing expenses. According to the complaint, the bank allegedly routed approximately Rs 45 crore—roughly $4.7 million—to the Maharashtra State Road Development Corporation under the guise of sponsorship for road safety campaigns. Plaintiffs claim these funds effectively functioned as an interest rate markup, providing a 6.01% return to lure large deposits while circumventing internal policies and Reserve Bank of India norms.

Legal counsel Joseph E. Levi asserts that these accounting maneuvers distorted the bank’s reported net interest income and operating expense figures, misleading investors regarding core net interest margins. During the relevant period, the bank reported net interest margins between 3.27% and 4.1%. The alleged practice came under scrutiny following an internal probe that reportedly held over ten senior officials responsible. Share prices saw significant volatility during the class period, including a 7.28% drop on March 18, 2026, following a leadership change, and a 4.1% decline on May 27, 2026, after news of the arrangement surfaced.