HDFC Bank Puts Senior Executives on Gardening Leave After Dubai Flags Compliance Lapses

HDFC Bank gardening leave and Dubai compliance lapses have come under the spotlight as two senior executives were benched amid an internal probe into Credit Suisse AT1 bond sales. Following a Dubai Financial Services Authority (DFSA) review, the HDFC Bank DIFC branch was barred from onboarding new clients from September 26, 2025, due to concerns around onboarding procedures and offering financial services to customers who were not properly registered.​

This action coincided with allegations that HDFC Bank mis-sold high-risk Credit Suisse Additional Tier 1 (AT1) bonds to UAE customers, with some reportedly being classified as “professional clients” without meeting regulatory criteria. The disputed AT1 bonds were globally written down after Credit Suisse’s rescue by UBS, resulting in substantial investor losses. While the bank denies any instances of mis-selling thus far, it has launched an internal investigation aimed at determining if internal controls were breached and who authorized the bond sales.

Authorities emphasized that existing clients are not impacted, but new business activities remain suspended until compliance gaps are addressed. The HDFC probe is expected to result in accountability measures once findings are finalized, with ongoing scrutiny from both Dubai and Indian regulators over how complex financial products are marketed to non-institutional investors.

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