The lawsuit, filed by Hagens Berman, centers on allegations that HDFC Bank funneled approximately Rs 45 crore—roughly $4.7 million—to the Maharashtra State Road Development Corporation. According to the complaint, management allegedly masked these payments as marketing expenses to provide the state firm with interest rates significantly above market standards, effectively bypassing Reserve Bank of India regulations. These actions reportedly resulted in overstated financial performance throughout the class period, which spanned from July 17, 2023, to May 26, 2026.

Market confidence began to erode in March 2026 when independent director Atanu Chakraborty resigned, citing practices that were not in alignment with his personal ethics, triggering a 7.28% drop in HDFC American Depositary Shares. Further scrutiny followed in May 2026 after an investigative report revealed an internal probe into the leadership's role in the scheme. Hagens Berman partner Reed Kathrein stated the firm is investigating whether executives intentionally concealed these payments while projecting an image of rigorous corporate governance. Investors who incurred losses during the specified period are encouraged to contact the firm before the court-mandated deadline to participate in the litigation.